At This Point, Are You Really Surprised There Was An Underlying Face Behind The Economic Recovery?

After the 2007–2008 financial crisis, it felt like something had to change. Not just in terms of fixing the economy, but in how we thought about the economy itself. The crash made clear that relying on the market to fix itself had failed—and not in a small way, but in a way that affected millions of people’s homes, jobs, and futures. So it’s easy to assume the government’s response under Obama would mark a clear break from that way of thinking. But Jonathan Levy shows that change wasn’t as deep as it looked on the surface. The Obama administration did respond quickly—the bank bailouts, the stimulus package, the Dodd-Frank regulations (Levy). But even with all that, Levy argues this was less a transformation and more a survival effort. What was being saved wasn’t just the financial system—it was the entire market-driven approach to organizing the economy. He writes that the response was about “buttressing the system” (Levy, xxv), not replacing it. The idea remained that private markets were still the best way forward, and that economic recovery would happen through maintaining investor confidence and restoring credit (Levy). This feels important, because it reminds us that just reacting to a crisis doesn’t mean breaking patterns of the past. The emphasis on growth, of valuing financial assets over wages, of focusing on GDP, and the health of “the market”—those ideas didn’t go away. If anything, they got reinforced by the urgency of the crisis. The state stepped in, but not to shift direction. It stepped in to keep the same direction from crashing completely. 

Levy also makes you think about who really holds power in moments like that. Congress and the president may be the most visible, but during the Great Recession, it was the Federal Reserve (the Fed) and the Treasury Department that moved first and moved fast. These are not elected institutions, but they became central to how the crisis was managed. The Fed cut interest rates and expanded its balance sheet in ways that were once unthinkable. Meanwhile, the Treasury oversaw the Troubled Asset Relief Program (TARP) and helped design the bailouts. Levy points out that this wasn’t a new tactic, exactly; it was a continuation of how financial policy had been evolving since the 1970s. The reason they both have so much authority goes beyond just their expertise. It also has to do with how the economy has been structured— more global and more complex, for example. In that kind of system, technical knowledge is power. And in an emergency, speed matters. That puts institutions like the Fed and Treasury in a position where they can act first, and elected officials often catch up later. Levy calls this a form of “crisis governance,” where the usual rules of democratic oversight get suspended in the name of saving the system (Levy, 558).

That trade-off—between technical efficiency and democratic input—seems worth thinking about. Because it didn’t end with the crisis. Those institutions are still leading today, whether it’s interest rate decisions, pandemic relief, or inflation control. So even though the crisis was framed as a failure of a system where companies could do more without government limits, the long-term outcome wasn’t a new model. It was a deeper reliance on the same logic, managed more aggressively by institutions that most people don’t get to vote for.