News Today

Tell me that guy’s accent wasn’t awesome. I read this today which seems slightly troublesome. I’d be so much more relieved if Bush wasn’t in office right now, but I already made a post about that today.

News Today - The Bush administration issued a 500 word response to a New York Times article portraying Bush’s role in the housing crisis (which we all know has led to our current financial crisis). Let’s take a look at what the article said.

“Mr. Bush did foresee the danger posed by Fannie Mae and Freddie Mac, the government-sponsored mortgage finance giants. The president spent years pushing a recalcitrant Congress to toughen regulation of the companies, but was unwilling to compromise when his former Treasury secretary wanted to cut a deal. And the regulator Mr. Bush chose to oversee them — an old prep school buddy — pronounced the companies sound even as they headed toward insolvency.

As early as 2006, top advisers to Mr. Bush dismissed warnings from people inside and outside the White House that housing prices were inflated and that a foreclosure crisis was looming. And when the economy deteriorated, Mr. Bush and his team misdiagnosed the reasons and scope of the downturn; as recently as February, for example, Mr. Bush was still calling it a ‘rough patch.’

The result was a series of piecemeal policy prescriptions that lagged behind the escalating crisis.”

Sounds fair enough to me. They even give Bush credit for calling the Fannie Mae and Freddie Mac problems, which he did. Perhaps if the administration had put more of a premium on honesty then Congress would have listened. Perhaps not though. This is all hindsight, and so I’ll echo the one thing Dana Perino said in her address that I agree with. Hindsight is 20/20.

Let’s take a look at the administration’s response. Perino’s statements in bold.

Most people can accept that a news story recounting recent events will be reliant on ‘20-20 hindsight’. Today’s front-page New York Times story relies on hindsight with blinders on and one eye closed.

Good to see the Bush administration still resorts to petty insults when confronted with someone who is in disagreement with them. I swear I’ve met third graders with more class…

The Times’ ‘reporting’ in this story amounted to finding selected quotes to support a story the reporters fully intended to write from the onset, while disregarding anything that didn’t fit their point of view. To prove the point, when they filed their story, NYT reporters were completely unfamiliar with the president’s prime time address to the nation where he laid out in detail all of the causes of the housing and financial crises. For example, the president highlighted a factor that economists agree on: that the most significant factor leading to the housing crisis was cheap money flowing into the U.S. from rest of the world, so that there was no natural restraint on flush lenders to push loans on Americans in risky ways. This flow of funds into the U.S. was unprecedented. And because it was unprecedented, the conditions it created presented unprecedented questions for policymakers.

In his address the president also explained in detail the failure of financial institutions to perform normal and necessary due diligence in creating, buying and selling new financial products — a problem that almost no one saw as it was happening.

Okay, so you foresaw the crisis before it happened. Good, that’s good. It’s also your job, but good… So what did you do to stop the crisis from unfolding Bush? What were your actions? Did you do anything to stop it?

That the NYT ignored such an important economic speech to the American people and the complex causes of the crises is gross negligence.

bla bla bla… get to the point…

The Times story frequently repeats a charge by the Administration’s critics: a ‘laissez faire’ attitude toward regulation. We make no apology for understanding the concept of regulatory balance. That is, regulation should be stringent enough to protect the greater public good and safety but not overly strong so that it unnecessarily inhibits innovation, creativity and productivity gains that are the sole source of increasing Americans’ standards of living. But while repeating this charge, the reporters gave glancing attention to the fact that it was this Administration that pushed for strengthened regulation and oversight, greater transparency, and housing reform.

You did not actually push regulation! You may have talked about it and said it was needed, like once or twice, but you didn’t do anything to address the problem. As good as intentions are, and I still think there’s a lot of mystery surrounding Bush’s intentions, American people have always cared about results more. Besides that, deregulation is only one part of the tale, and we know you played a role in other parts as well. This is why C students should not be president!

The story also gives kid glove treatment to Congress. While the administration was pushing for more transparent lending rules and strengthening oversight and supervision of Fannie and Freddie, Congress for years blocked attempts at stronger regulation and blocked reform of the Federal Housing Administration. Democratic leaders brazenly encouraged Fannie and Freddie to loosen lending standards and instead encouraged the housing GSEs to play a larger and larger role in the housing market — even while explicitly acknowledging the rising risks. And while the story notes the political contributions of some banks to Republicans, it neglects that political contributions from Fannie Mae and Freddie Mac overwhelmingly supported Democratic officials — in particular the chairmen of the Banking committees. In fact, even in the midst of what by then was a housing crisis, it took Congress nearly a full year to pass specific legislation called for by the president in the summer of 2007, especially legislation to reform oversight of Fannie Mae and Freddie Mac.

Perhaps if this was a story about Congress’s role in the crisis then they would have had devoted more space to that. But it wasn’t, it was about Bush’s role, so quit pointing the finger all around.

There are many more reporting failures in this story — failure to consider the impact of monetary policy; ignoring the regional nature of housing markets; and ignoring the Bush administration’s historic proposal to overhaul the nation’s regulatory system, for example. But then a review of these issues would wave complicated the reporters’ myopic point of view that only Bush administration policies could possibly be responsible for the housing and finance crises.

Well, Bush, there are many failures in your administration too. Failure to keep our country safe, failure to catch the 9/11 culprit, failure to advance green technologies, failure to keep gas prices under control in your administration, failure to promote our education system, repeated failure to tell the truth to Americans about Iraq, failure to abide by the laws of our constitution, failure to deal with the financial crisis, failure to protect the American economy, failure to protect American’s jobs, failure to deal with healthcare, failure at keeping Americans in good will with the rest of the world.

January 20th could not come sooner.