by Deb Cupples | Some right-wing media folks are trying to blanketly blame Democrats for the nation's housing and mortgage crises, which are at the root of the credit crisis that underlies the largest corporate bailout in U.S. history.
A couple weeks ago, for example, the Wall Street Journal claimed that Rep. Barney Frank (D) was at fault for the mortgage crisis, because he had loosened standards for home mortgages: reportedly, Mr. Frank actually spent a few years trying to tighten standards.
Blame is flying leftward in some media, despite the fact that Republicans controlled Congress from January 2003 - January 2007 (see here and here) -- with 2006 being the height of the housing bubble. Republicans also controlled the White House from 2001 to present.
Yesterday, the New York Times focused on President Bush's role in the mortgage crisis:
"The global financial system was teetering on the edge of collapse when President Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, “scared the hell out of everybody.”
"It was Sept. 18. Lehman Brothers had just gone belly-up, overwhelmed by toxic mortgages. Bank of America had swallowed Merrill Lynch in a hastily arranged sale. Two days earlier, Mr. Bush had agreed to pump $85 billion into the failing insurance giant American International Group.
"The president listened as Ben S. Bernanke, chairman of the Federal Reserve, laid out the latest terrifying news: The credit markets, gripped by panic, had frozen overnight, and banks were refusing to lend money.
"Then his Treasury secretary, Henry M. Paulson Jr., told him that to stave off disaster, he would have to sign off on the biggest government bailout in history.
"Mr. Bush, according to several people in the room, paused for a single, stunned moment to take it all in.
"'How,' he wondered aloud, 'did we get here?'
"Eight years after arriving in Washington vowing to spread the dream of homeownership, Mr. Bush is leaving office, as he himself said recently, “faced with the prospect of a global meltdown” with roots in the housing sector he so ardently championed....
"There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk.
"But the story of how we got here is partly one of Mr. Bush’s own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.
"From his earliest days in office, Mr. Bush paired his belief that Americans do best when they own their own home with his conviction that markets do best when let alone.
"He pushed hard to expand homeownership, especially among minorities, an initiative that dovetailed with his ambition to expand the Republican tent — and with the business interests of some of his biggest donors. But his housing policies and hands-off approach to regulation encouraged lax lending standards.
"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." (NYT)
It's an interesting read, and you can see the rest of The Times' article here.
Memeorandum has commentary.
Other Buck Naked Politics Posts
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* Cutting Executive Pay Would Save Jobs
* Wall Street "Wizard's" Magic Turns out to be Fraud
* Are Bailout Funds Being Misused?
* Fannie CEO Got $38 Million for Making Risky Buys
* Lehman Execs Redistributed Shareholder Wealth (to Themselves)
* AIG Execs Redistributed Shareholder Wealth (to Themselves)
* Execs Made Millions While Driving Companies into Ditch
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