US Treasury Secretary Timothy Geithner defended the financial sector overhaul enacted after the 2008 meltdown, saying the safeguards could have gone a long way toward averting the crisis.
“Some people seem to be suffering from amnesia about how close America came to complete financial collapse under the outdated regulatory system we had before Wall Street reform,” he wrote in a Wall Street Journal op-ed published late Thursday.
He went on to say that President Barack Obama and the June 2010 bill’s authors, Senator Christopher Dodd and Representative Barney Frank, deserve “enormous credit for pushing for tough reforms quickly.”
“If these reforms had been in place a decade ago, then the rise in debt and leverage would have been less dangerous, consumers would not have been nearly as vulnerable to predation and abuse, and the government would have been able to limit the damage that a financial crisis could have on the broader economy.”
The Republican candidates vying to take on Obama in November’s presidential election accuse him of burdening the economy with cumbersome regulations and have slammed his $787 billion economic stimulus plan enacted in 2009.
Geithner said his wife looks up from the newspaper with “bewilderment” when she reads about Wall Street firms and lobbyists complaining about the reforms or saying they didn’t need the massive bank bailouts of 2008 and 2009.
“She reminds me of the panicked calls she answered for me at home late at night or early in the morning in 2008 from the then-giants of our financial system,” he said.
Obama has defended the government’s intervention in the wake of the 2008 crisis, saying it helped save the country from another Great Depression.
His Republican rivals have slammed his policies, saying they cost too much and have failed to get Americans back to work.