http://transcripts.cnn.com/TRANSCRIPTS/1003/14/fzgps.01.htmlZAKARIA: Now for our what in the world segment. What got my attention this week was an anniversary. Tuesday marked the first anniversary of the Dow's lowest point in this recession. One year ago on March 9th, 2009, the Dow Jones industrial average closed at 6,547 points, its lowest level in more than 12 years. The collapse, you remember, was caused by widespread fears that the American financial system was teetering on the edge and could take down the entire economy with it. But that never happened. And in fact since then, the Dow has been on a steady climb upwards with a few minor dips and plateaus. This week, the Dow was hovering around 10,500 points. That's up 60 percent in a year.
Now, one month before the Dow hit that lowest of lows, there was a different kind of low. At what was essentially his coming out party, Treasury Secretary Timothy Geithner bombed. He was announcing on television the administration's plan to fix the banks. The government would buy up toxic assets, conduct stress tests to make sure that individual banks could survive and inject equity into those that needed it. Geithner's performance was pretty universally panned. Everyone said the plan didn't make sense. It could never work. It wasn't enough. Thirteen months later, Geithner's critics are mostly silent. The plan worked. It was enough and it won't end up costing taxpayers very much either.
Since last May, when the Treasury Department released the results of the stress tests, the banks had raised more than $140 billion in capital. All of America's big banks are now well capitalized and making money and there's very little taxpayer money invested in the banks anymore. They have paid almost all of it. The Treasury says that in the end, all of the emergency government financial programs will cost taxpayers less than the savings and loan crisis clean-up did in the 1980s.
Now, there are some critics who contend that Geithner's plan worked, but at a price. It cushioned bankers or that swifter solutions should have been used such as nationalizing banks. Maybe, but of course, something like nationalization would have had huge uncertainties, huge costs associated with it. Geithner's plan was a shrewd, middle course. It solved a huge problem, came in under budget and is now winding itself out of existence, not bad for a government program and we'll be right back <after commercial>.
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