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Year of living dangerously

While Obama looks back in relief, the aftershocks of the financial crisis are far from over. Shakeouts, bailouts & plain doubts

business Updated: Sep 13, 2009 21:30 IST
Stephen Collinson

A year after Lehman Brothers collapsed and unleashed global financial contagion, President Barack Obama will argue on Wall Street Monday that his policies rescued an economy that now must be rebuilt.

In a major speech in the symbolic surroundings of Federal Hall, New York, Obama will outline the steps he took after taking office at a time of investor panic, and say his administration staved off a second Great Depression.

Then, aides said, the president will refocus attention and issue a call for action on financial, regulatory and structural problems still dogging the slowly reviving economy, which he believes will underpin long-term recovery. “We are making a clear transition from rescue as the priority of public policy to sustained recovery,” said Lawrence Summers, director of National Economic Council. “We have moved back from the brink of financial catastrophe to a set of very important problems that need to be managed.”

The speech will come a week before Obama hosts the next Group of 20 summit in Pittsburgh, where global economic powers will try to agree a strategy to head off future crises. In recent weeks, as economic indicators have suggested glimmers of hope, the White House has argued there is evidence Obama’s approach is reaping dividends.

Last week, the administration argued that its huge, politically risky $787 billion stimulus plan had created or saved up to 1.1 million jobs.

This followed a flurry of polls showing that most Americans believe conversely that the stimulus plan is having no impact.

Officials predict a possible return to positive economic growth in the third quarter this year, a moment that will mark a political milestone for the administration.