President Barack Obama today credited “aggressive and innovative” steps for pulling the US economy back from the brink – but he warned against complacency.
In a major economic address coinciding with the first anniversary of the collapse of Lehman Brothers, the president said the “storms of the past two years” were beginning to break.
But he attacked part of the financial sector for ignoring the lessons of the last twelve months, accusing them of putting the nation’s future well-being in peril.
“The fact is many of the firms that are now returning to prosperity owe a debt to the American people,” he said.
“It is neither right nor responsible after you’ve recovered with the help of your government to shirk your obligation to the goal of wider recovery, a more stable system and a more broadly shared prosperity.”
Lehman Brothers filed for Chapter 11 bankruptcy protection in the early hours of September 15 last year (UK time) in a move seen as a defining moment in financial history.
The collapse of one of the world’s largest investment banks created an aftershock so devastating that markets are only now beginning to recover their poise.
In today’s speech, delivered at Federal Hall in New York, Mr Obama trumpeted measures he introduced to prevent the US economy slipping further into recession or even a depression.
The president said that when he came to power at the beginning of the year the situation was no longer just a financial crisis.
“It had become a full-blown economic crisis,” he said.
He cited quick action and “aggressive and innovative steps” in the credit market as factors that helped restore stability, encouraging lending and assist struggling homeowners.
He suggested things had improved to an extent that the need for government intervention was now waning.
Furthermore, taxpayers were beginning to see a return on their bail-out of the banks, the president said.
“Banks have repaid more than 70 billion dollars (£42 billion), and in those cases where the government’s stake has been sold completely, taxpayers have actually earned a 17% return on their investment,” he said.
But in a cautionary note, the leader of the world’s richest nation added that a great deal of work was still needed.
“Normalcy cannot lead to complacency,” the president said.
To those in Wall Street who were beginning to revert to bad practice he had this warning: “We will not go back to the days of reckless behaviour and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses.”
He concluded the address by stating that all countries needed to play a part in the continued economic recovery efforts.
This work, the president said, would continue at next week’s G20 summit in Pittsburgh.