Summers Defends Government Bailouts as Necessities

WASHINGTON -- President Obama's economic adviser is defending the administration's efforts to rescue banks, insurance companies and car makers as "necessity not choice."

In remarks to the Council of Foreign Relations expected Friday, White House National Economic Council Director Lawrence Summers  says that one major economic crisis pops up about every three years, and it's the fault of a broken financial system not government intervention.

"Problems emanating from the financial sector in each case profoundly disrupted the lives of hundreds of thousands or even tens of millions of people.  Surely our fellow citizens are right to demand of those of us involved with the financial system greater stability and safety," he says.

His remarks come after government bailouts have put billions of taxpayer dollars at risk. The government has spent hundreds of billions to bail out several banks through the Troubled Assets Relief Program as well as General Motors and Chrysler, both of which have gone bankrupt.

Summers says the president "did not run ... to manage banks, insurance companies or car manufacturers."

"We only act when necessary to avert unacceptable -- and in some cases dire -- outcomes," Summers says, according to excerpts released by the White House.

"Our objective is not to supplant or replace markets.  Rather, the objective is to save them from their own excesses and improve our market-based system going forward," he says.