More Proof That Bush, Paulson, Geithner, Bernanke, And Obama NAILED It In Dealing With The Financial Crisis

carmen reinhart

Photo: Wikipedia

Carmen Reinhart and Kenneth Rogoff, who wrote the book on the most recent financial crisis – “This Time is Different” – released a white paper Sunday reviewing the economy since the financial crisis.And overall, they had positive things to say about the U.S.

“According to our (2009) metrics, the aftermath of the U.S. financial crisis has been quite typical of post-war systemic financial crises around the globe,” they wrote.  “If one really wants to focus just on United States systemic financial crises, then the recent recovery looks positively brisk.”

The authors highlight 1873, 1892, 1907, and 1929 as other systemic banking crises endured by the U.S. economy.

Real Per Capita GDP in Past Systemic Crises

Photo: Reinhart & Rogoff

The chart above, provided in their research, shows that the recovery has been slightly better than in the past as measured by real GDP per capita levels.The two economists also demonstrate that the U.S. has seen a more significant improvement to real GDP per capita than other advanced economies that suffered a systemic banking crisis, as seen in the chart below. However, using this metric the U.S. has recovered less robustly than countries plagued by a borderline crisis – a less severe blow to a country’s financial sector.


Real Per Capita GDP in 2007 Systemic Crisis

Photo: Reinhart & Rogoff

Indeed, the U.S. economy recovery has indeed been sluggish compared to most recessions.  But relative to recessions sparked by systemic crises, the recovery has been pretty remarkable.This is really a huge endorsement of the response that U.S. leaders took. George W. Bush, Hank Paulson (his Treasury secretary), Ben Bernanke, Barack Obama, and Tim Geithner have taken a lot of flack for how they handled the economic and financial crisis. People called on them to do all kinds of other things based on their pet ideas. But the economists’ history seems clear now: Bailouts + easy money + fiscal stimulus is now the blueprint for future leaders.

Download the whole paper at

SEE ALSO: FORGET GOLD: Here’s Where Die-Hard sceptics Are Storing Their Wealth >

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