News / Economy

    Barney Frank: Financial System Safer Five Years After Crisis

    Barney Frank: Financial System Safer Five Years After Crisisi
    X
    September 18, 2013 10:31 AM
    Five years after the financial meltdown, the co-author of the Wall Street Reform Act says the US financial system is safer. Former Congressman Barney Frank tells VOA that actions taken after the 2008 crisis will help prevent a similar crisis in the future. But as Mil Arcega reports, economists say we’re not out of the woods yet.
    Five years after the worst financial crisis since the Great Depression, former U.S. congressman Barney Frank feels the risks of another calamitous bank failure that could throw the global economy into a downward spiral have diminished. However, although Frank insists the risks have been greatly reduced and that "the economy is better off than it was five years ago for almost everybody,” economists say the U.S. recovery remains mixed.
     
    Expectations of a quick turnaround were misplaced, claim experts such as Robert Bixby of the Concord Coalition.

    "It was a major catastrophic bursting of the bubble and that takes a lot longer to recover from."

    Former Treasury Secretary Henry Paulson, who helped bail out some of the biggest financial firms in 2008, said that as unpopular as it was, the TARP program, which authorized the government to purchase up to 700 billion dollars of troubled assets, helped prevent a bigger crisis.

    "The American people never understood , never understood, we did these [bailouts] to prevent a disaster... Barney and I both understood, we could have had something that rivaled the Great Depression.”
     
    Five years after the onset of the crisis, the biggest banks are once again profitable. U.S. stock prices are 26 percent higher than they were in 2008 and America’s top CEOs are earning more than they did before the crisis. 
     
    However, despite good news on Wall Street, unemployment remains high and the median income for Americans is lower than it was before the crisis. The OECD has even said that the United States now has the greatest level of income inequality among developed nations.
     
    Barney Frank feels that this charge is not entirely related to the crisis, and pointed out that America’s high levels of inequality were present before 2008 and that resolving the financial crisis would not necessarily entail also tackling income disparity, stating that the financial legislation that was passed was to “stop bad things from happening,” and that “nothing in there makes good things happen."
     
    Some blame the two sided recovery on dysfunction in Washington. Economist Joe Gagnon of the Peterson Institute said the drawn out budget battle of 2010 and deep government spending cuts enacted by Congress earlier this year insure that the recovery will remain tepid.

    Considering future hurdles, Gagnon said, “I think the only thing that could hurt us in the short run would be a catastrophic political impasse in Washington. You know, a government shutdown that would drag on for months."
     
    Another potential wrinkle could come on Wednesday, when the Federal Reserve is expected to announce whether it plans to scale back monetary policies that have kept long term interest rates at record lows.

    You May Like

    Video Obama Remembers Fallen Troops for Memorial Day

    President urges Americans this holiday weekend to 'take a moment and offer a silent word of prayer or public word of thanks' to country's veterans

    Upsurge of Migratory Traffic Across Sahara From West to North Africa

    A report by the International Organization for Migration finds more than 60,000 migrants have transited through the Agadez region of Niger between February and April

    UN Blocks Access to Journalist Advocacy Group

    United Nations has rejected bid from nonprofit journalist advocacy group that wanted 'consultative status,' ranking that would have given them greater access to UN meetings

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8954
    JPY
    USD
    109.65
    GBP
    USD
    0.6827
    CAD
    USD
    1.3037
    INR
    USD
    67.037

    Rates may not be current.