Five years ago, Lehman Brothers announced it would file for Chapter 11 bankruptcy protection. Lehman was a giant of the financial system, the fourth largest investment bank in the U.S., a firm that employed thousands of brokers and analysts, with billions in assets that were suddenly worthless, and its collapse sent shock waves through the global economy.
It became obvious that President Obama would inherit a staggering economic crisis. The challenge that he was forced to confront didn’t begin in 2008. Middle-class security had been slowly eroding for decades as many jobs became obsolete or were shipped overseas.
By the end of 2008, the economy was shrinking by an annual rate of more than 8 percent, our businesses were shedding 800,000 jobs a month, and credit was frozen for families and small businesses. We were in the midst of the worst economic crisis since the Great Depression.
On Jan. 20, 2009, the day this president took office, the auto industry was on the brink of collapse and he was wrestling with how to help the millions of families in thousands of communities who would have been devastated if the auto industry failed.
Home prices were down by 19 percent, and 10 million borrowers were underwater. Home sales were near an all-time low. The Consumer Financial Protection Bureau was created to make buying a home simpler and safer. Today, home prices are rising at the fastest pace in seven years, and sales are up 47 percent.
Every decision Obama made was designed to stop the economy from spiraling out of control, put people back to work, and reverse the trends that had clobber the middle class for decades. The task of clearing away the rubble of the crisis and building a new foundation for sustained economic growth was monumental.