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  • US Financial Bailout Chief Resigns

    Published on September 23, 2010

    Herb Allison, the official in charge of the  US Government’s 700-billion-dollar financial bailout fund announced his resignation Wednesday.

    Allison, a senior official of the Treasury Department responsible for the Treasury’s Troubled Asset Relief Program, or TARP, announced his intention to step down in a letter to the Treasury Department’s Office of Financial Stability (OFS).

    This announcement came just one day after U.S. President Barack Obama’s chief economic advisor, director of the National Economic Council Lawrence H. Summers, announced his decision to return to Harvard University at the end of the year.

    The bailout package, which was launched in October 2008 when the financial market was on the edge of collapse, was frequently criticized by Republicans as a waste of taxpayers’ money. But Allison argued that the plan was successful in achieving its goal of stabilizing the nation’s financial system.

    Treasury Secretary Timothy Geithner said in a statement Wednesday that Tim Massad, who is currently the chief counsel and chief reporting officer for the bailout program, will be taking over as acting head.

    While praising the work that the OFS has done to stabilize the financial system, Geithner recognized that “we have not yet repaired all the damage.”

    “This recession cost us dearly millions of lost jobs, trillions in lost savings, thousands of failed businesses, homes foreclosed, retirements delayed, educations deferred. Across the country, families are still hurting. And it’s going to take time for us to get everyone back on their feet,” he said.

    Obama’s economic team has recently announced a series of personnel changes. Apart from Summers and Allison, Christina Romer, who chairs the White House Council of Economic Advisors (CEA), also announced decision to step down.

    Analysts say that those personnel changes indicate the political challenge that the Obama administration is facing under the pressure of an election year.

    Republicans criticized that the Obama administration’s economic policy has failed, at least in terms of unemployment rate. They called for Obama to fire both of his top economic advisors — Geithner and Summers.