US President Barack Obama plans to mark the five-year anniversary of the collapse of Lehman Brothers and talk about the economic gains made since then, according to a White House statement.
Obama has scheduled a speech in the Rose Garden today and will warn against “more self-inflicted wounds from Washington” as Congress considers a new budget and debates an increase in the debt ceiling.
The scheduled remarks reflect a deliberate shift, as the White House turns its attention to looming budget battles with Congress.
The Lehman Brothers bankruptcy filing on September 15, 2008, helped trigger a global financial crisis and deepened an economic recession.
It was followed by a slide in the US stock market and a $182 billion (about R1.8 trillion at Friday’s rate) government bailout of insurer American International Group.
The government intervened in the banking, insurance and motor industries as it revamped financial regulations. Obama proposed and Congress passed an $831bn economic stimulus package.
The Standard & Poor’s 500 index plunged 46 percent from the last trading day before the Lehman Brothers bankruptcy to a closing low of 676.53 on March 9, 2009.
Unemployment rates surged to 10 percent as the economy lost 8.7 million jobs between January 2008 and February 2010.
Five years after the crash, the country has not recovered all the jobs it lost and the unemployment rate stood at 7.3 percent in August.
The country’s economy has made gains, including the creation of 7.5 million private sector jobs.
Obama will say that more needs to be done to strengthen the middle class “and those fighting to get into it”, according to the White House statement.
His speech will aim at deadlines legislators must meet to avoid a government shutdown on October 1, the start of a new fiscal year, or risk a default on government debt as early as mid-October. – Bloomberg