Bush Talks About The Economy…Barely
By Justin Gardner | Related entries in 2008 Election, Barack, Bush, Economy, McCain, Republicans, VideoJust how much of lame duck is he? Ask yourself the following: do I really care what he has to say about the economy?
Still, here’s his statement:
So yes, not much “there” there, and the fact that he didn’t take questions is a sad, but certainly not unexpected at this point.
Still, what can he really say? Especially when the “deregulation” mantra he’s pushed for the last 8 years has the appearance of creating one of the worst financial disasters in the last 100 years.
Listen, I’m sure some of your will disagree, but the true free market ideology has taken a massive hit this week, and Bush certainly hasn’t stood in the way of Paulson as he does exactly the opposite of what conservative economic philosophy espouses.
So when we turn this back to the campaign trail, I don’t see how this benefits McCain in ANY way, shape or form. Because unless Obama suddenly comes out and say something incredibly dumb about the economy, people will tie these crises to Bush and then to McCain.
In short, “Experience” loses once again.
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September 18th, 2008 at 11:15 am
Justin, I will concede that deregulation is particularly a problem when you have a high-level of government involvement (in the form of mandatory risk-ratings and loan guarantees) in the capital markets. Would you argue with that? I am not suggesting there was an absence of misfeasance in the private sector, however that misfeasance was substantially supported by government sponsored market intervention to increase homeownership. A “chicken-in-every-pot” policy certainly helped, if not created, this problem.
September 18th, 2008 at 11:38 am
Justin, in 2003, it was George Bush who recommended an overhaul of the financial services system, and it was a coalition of Democrats who blocked it.
Remember what Barney Frank said about Bush’s plans?
The democrats felt that regulating subprime mortgages would reduce lower income families and minorities from getting loans to buy homes. They were right. The problem was that these families didn’t report that they actually couldn’t afford the homes, or that the lenders didn’t care. These mortgages were sold as securities to invesment firms with fraudulent AAA ratings. Free market doesn’t mean your allowed to defraud people.
So in the end, Bush did favor more oversight and regulation and has not been pushing this “mantra.” You don’t bother to investigate this fact because it doesn’t fit your partisan narrative and your deep-seeded, irrational hatred of Bush. You have repeatedly called McCain and Palin lyars during this campagin. Guess what, you are a lyar now Justin. You are lying about President Bush. Lyar, Lyar, Lyar.
September 18th, 2008 at 12:32 pm
@J. Harden – It wasn’t a populist push to put people in homes that caused this mess, at least not from the government side (I’ll concede that consumers were overzealous and share some blame). It was the unexpected demand for mortgage-backed securities, which put pressure on financial companies to create more of those financial instruments, to the point where they not only encouraged poor risks, but outright lied to consumers and coached those consumers to lie. This was the result of a too-good-to-be-true investment vehicle that spun out of control, while everyone hid their heads in the sand, including the federal government. To put this on liberal ideology is patently absurd.
September 18th, 2008 at 12:52 pm
Dr. Pete — What was creating the demand for subprime mortgage-backed securities? Let’s keep this analytical line going, because I’m sure that we are going to get to something. I’m not saying that there wasn’t an element of irrational market exuberance, but usually that exuberance is precipitated by something. What could it be in this instance?
September 18th, 2008 at 1:32 pm
NPR (granted, I know some feel that equates to liberal bias) had a great story called “The Global Pool of Money” a few weeks back. If you trace the story, the mortgage-backed securities were a very attractive investment vehicle – seemingly low-risk with solid return rates. Once they were introduced, investors wanted them, because, despite the bad markets, there’s a lot of uninvested money in the global market waiting for something worth investing in. This wasn’t due to housing demand, it was simply demand for the investment itself by the market.
Unfortunately, there weren’t enough mortgages out there to package into investments, so the industry started needing to, essentially, create more mortgages. The easiest path was to make mortgages easier to get. That worked for a while, but they eventually ran out of decent candidates, so the pressure mounted to put people who were higher risk into homes. Eventually, they went from pushing the risk envelope to changing the rules, and finally to breaking the rules.
Now, granted, there had to be some desire by consumers to own a home, and a willingness to believe something that was too good to be true. Much or the pressure, though, came from the financial industry. I’ve seen very little to indicate that this pressure came from government policy.
September 18th, 2008 at 3:57 pm
You can’t blame the homeowners. Look it’s the banks job to decide if a loan is a wise bet. Even if the homeowner “lied” and said they could make the payments, it’s up to the bank to verify that. I’m not saying help out the homeowners, I’m saying let it all fall down.
You want free markets, till the free market fails, then the gov’t should step in. All those who trumpet deregulation, free trade and the like have to be will ing to take market crashes and loss of jobs as part of the deal. What will happen is our economy will eventually slow and then be competitive with the rest of the world for labor. But you can’t have your cake and eat it too. I’m sorry kiddies.
September 18th, 2008 at 6:32 pm
I’m generally a free market supporter, but freedom comes with responsibility. For example, in states that allow motorcycle riders to ride without helmets, the taxpayers should not be on the line for the hospital bill.
In this case, the fact that government has to step in to bail out failing financial institutions means that they should not be “free”. If you expect government to bail you out, the government should be able to regulate you to minimize the chance you will need a bail-out. So in this case, since the experts I’ve read seem to be in agreement that bail-outs are a necessary evil, clearly better regulation is needed since the taxpayers are the ultimate security.
On another note:
I’m struggling to make sense of the credit crisis and from what I’ve read, it’s generally the result of greedy banks making overly risky decisions. But isn’t greed the whole point of the free market? The desire for wealth is what’s supposed to fuel our economy, spawning innovation. If executives were really just greedy, why did they make decisions that caused their financial institutions to fail? You would think greed would cause people to make decision that would make them more money, not less. I’m struggling to understand how greed could case someone to make a decision that is against their financial interest.
My only theory (which I’m not able to support much) is that perhaps there are too many short-term incentives (such as needing to meet quarterly earnings goals) and not enough long-term incentives. Perhaps this could be the result of a disproportional amount of short-term investors. Essentially, even if everyone knows the bank will eventually fail, if you can get get in and get out at the right time, you still make money on the way up. Essentially, our financial system played hot potato. Anyway, that’s my random arm-chair economist theory. If I’m right, we need to figure out a way to make long-term investment more attractive, so that businesses will be more likely to make decisions that will be good over the long term.