One of President Barack Obama’s top economic strategists said on Thursday that the government was now starting to shrink many parts of the gigantic financial bailout that followed the collapse of Lehman Brothers last September.
After subjecting the nation’s biggest banks to the most public scrutiny in decades, federal regulators ordered 10 of them on Thursday to raise a total of $75 billion in extra capital and gave the rest a clean bill of health.
The United States and Britain appear to be converging on a common solution for the financial chaos sweeping the world, one day before a crucial meeting of financial leaders begins in Washington that the White House hopes will result in a more unified response.
After pouring vast amounts of money into financial institutions of almost every type, and having little to show for it, the Bush administration and the Federal Reserve are suddenly taking a new look at ordinary homeowners.
The U.S. economy officially sank into a recession last December, which means that the downturn is already longer than the average for all recessions since World War II, according to the committee of economists responsible for dating the nation’s business cycles.
For years, a congressional hearing with Alan Greenspan was a marquee event. Lawmakers doted on him as an economic sage. Markets jumped up or down depending on what he said. Politicians in both parties wanted the maestro on their side.
For the Federal Reserve and the Treasury Department, it is crunch time.
With the credit markets once again deteriorating, the nation’s two top economic policymakers acknowledged Thursday that the outlook for the economy had worsened, as both came under criticism for being overtaken by events and failing to act boldly enough.
The Federal Reserve, confronted by deepening panic in global financial markets about a possible recession in the United States, struck back on Tuesday morning with the biggest one-day reduction of interest rates on record and at least temporarily stopped a vertigo-inducing plunge in stock prices.
The Bush administration on Monday proposed leasing out millions of acres along the coasts of Alaska and Virginia to oil and gas drillers, a move that would end a longstanding ban on drilling in those environmentally sensitive areas.
President Bush announced Monday that he had directed his administration to begin the long process of establishing higher fuel efficiency standards for new cars.