This month marks the five-year anniversary of the height of America’s economic crisis of 2008. To many members of the business community, September is a reminder of the hardships we still face as America fights its way back to economic prosperity.
The financial crisis was the result of multiple factors — a housing boom aided by the easy access to mortgages, financial institutions participating in risky situations, and America’s outdated financial regulations. And since the height of the crisis in September of 2008, the US government has responded forcefully, enacting many policies that have helped the business community from sinking into a far worse place.
Under the Bush Administration, a law was proposed to create the Troubled Asset Relief Program (TARP). The government program strengthened the business world by purchasing assets and equity from financial institutions. The proposal went to Congress and passed with support from both Democrats and Republicans; it was signed into law by President Bush in October of 2008. The Bush Administration also ensured broad-based guarantees of bank accounts, money market funds, and liquidity by the Federal Reserve.
Following his inauguration in January of 2009, President Obama and his Administration continued to assist financial institutions on their road to recovery. The current Administration expanded TARP, which kept credit flowing to consumers and businesses, helped homeowners avoid foreclosure, and saved an estimated one million American jobs by saving the American automotive industry from collapse.
But all of this wasn’t enough. The United States needed to create a regulatory framework for the 21st century — resulting in the Dodd-Frank Wall Street Reform and Consumer Protection Act to ensure an economic crisis of this nature never occurred again. The law prevents excessive risk-taking from the financial community and created a consumer watchdog position to prevent mortgage companies and pay-day lenders from exploiting customers.
While much has been accomplished in the last five years to ensure this severe of a crisis never hurts American businesses again, more work is necessary — making innovation imperative during the road to recovery.