Michael G. Oxley, an Ohio Republican and then-chairman of the House Financial Services Committee, had produced what Mr. Snow viewed as “a pretty darned good bill,” a watered-down version of what the president sought. But at the urging of Mr. Card and the White House economics team, the president decided to hold out for a tougher bill in the Senate.
Mr. Card said he feared that Mr. Snow was “more interested in the deal than the result.” When the bill passed the House, the president issued a statement opposing it, effectively killing any chance of compromise. Mr. Oxley was furious.
“The problem with those guys at the White House, they had all the answers and they didn’t think they had to listen to anyone, including the Treasury secretary,” Mr. Oxley said in a recent interview. “They were driving the ideological train. He was in the caboose, and they were in the engine room.”
And the Times calls out another Bush administration “Brownie”, James Lockhart, a prep-school pal who he put in charge Fannie and Freddie’s regulator, OFHEO:
Throughout that spring and summer, he warned the White House and Treasury that, in the stark words of one e-mail message, “Freddie Mac is in trouble.” And Mr. Lockhart, he charged, was allowing the company to cover up its insolvency with dubious accounting maneuvers.But Mr. Lockhart continued to offer reassurances. In a July appearance on CNBC, he declared that the companies were well managed and “worsts were not coming to worst.” An infuriated Mr. Thomas sent a fresh round of e-mail messages accusing Mr. Lockhart of “pimping for the stock prices of the undercapitalized firms he regulates.”
Mr. Lockhart defended himself, insisting in an interview that he was aware of the companies’ vulnerabilities, but did not want to rattle markets.
“A regulator,” he said, “does not air dirty laundry in public.”
When the history books are written, it will be Wall Street, not George W. Bush, that is the key culprit in creating this mess. Bush’s role, along with those of his predecessors, was as enabler, allowing the beast to run amok with little or no attempt to rein it in.
just two sentences in, but its laughable that bush has the gaul to call anyone's actions "gross negligence", that has been his philosophy from day 1.
Posted by ian on Mon 22 Dec 2008 at 05:42 PM
This review would probably have been better received at the white house. At least it says directly Wall Street is the key culprit. And isn't that their complaint and what was missing in the NYT article? To point to one aluding blurp and say it was mentioned is a stretch. And you continue the extreme suggestion oft-repeated that no regulation/no oversight was the goal when "Bush flack" (your words)Dana Perino's stmt makes specific mention of the obvious need for regulation up to the point it discourages progress. This is not to suggest adaquate oversight took place but rather to point out another straw man created by so many.
Posted by jrr on Mon 22 Dec 2008 at 06:26 PM
Here's what the NYT wrote in 2003:
From the NYTimes, 9/11/03:
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new
agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios. . .
Posted by Sigmond on Mon 22 Dec 2008 at 06:45 PM
C'mon, Ryan, this is once again another tiresome hit piece from the hugely political left wing axe-grinding New York Times.
How sorry the NYT is now. From Jayson Blair, to Judy Miller, to Duff Wilson -- from the unethical to the incompetent -- headed by that inept Pinch and the tone deaf Bill Keller. It's the Titanic heading for the iceberg -- or purchase by Rupert Murdoch.
Pathetic.
Posted by Karl K on Mon 22 Dec 2008 at 07:18 PM
jrr, this story, as I mentioned, is part of a 15-part (so far) series called "The Reckoning" that the Times is doing on the origins of the financial crisis.
This particular story is about Bush's role in creating and/or fostering the crisis. The others were about many other culprits, including the Democrats Chuck Schumer, Henry Cisneros, and Robert Rubin.
See the list of stories here. I recommend you and everyone read every last one of them, it is the best body of journalism on this so far from any publication:
http://topics.nytimes.com/top/news/business/series/the_reckoning/index.html
As to Dana Perino's statement about the need for regulation: If you believe that what the PR person is saying now about regulation was the operative philosophy of the Bush administration throughout its terms, you need to revisit the historical record. Just because you say you are for regulation, doesn't mean that you regulate. Bush (and to a large extent, Clinton) didn't. He loosened oversight. That is not in dispute anywhere.
I didn't say that his goal was no oversight--though that was closer to his agenda that effective oversight was. Self-policing was Bush's answer time after time to regulation and it just hasn't worked.
Sigmond: The point is that didn't become law. Presidents don't rule by fiat even when their party controls Congress, as Bush's Republicans did in 2003. They have to compromise to get legislation through. The Times points out that Bush scuttled such a compromise, so nothing happened.
Karl, If you want to dispute something in the story, please point it out. I'd recommend that you follow the link I posted above in this comment and read the entire series.
This story fits neatly into that body of work, and even standing alone, it is more than fine.
Thanks for writing, all.
Posted by Ryan Chittum on Mon 22 Dec 2008 at 09:51 PM
Back in July, Bush said "I think the system basically is sound, I truly do, and I understand there's a lot of nervousness. . . . But the economy is growing, productivity is high, trade is up, people are working. It's not as good as we'd like."
Case closed!
Posted by Larry Linn on Mon 22 Dec 2008 at 10:33 PM
I love this blog.
Too bad Bush went after what he considered the over-regulation of Fannie and Freddy and didn't make any effort to simply shrink the GSEs. What an odd conservative. Not only did he enlarge government spending, but he trusted it would be money well-spent.
Posted by Chris Corliss on Tue 23 Dec 2008 at 01:59 AM
Ryan:
How disenguous.
To suggest that the Times spread the blame for the housing mess is flat-out wrong. They devoted roughly 40 words in a 5,000 word article to culpability of those outside the Bush admin, directing nearly all of their animus toward Bush.
Bush has made plenty of mistakes, no doubt, but this is a case of journalistic piling-on.
The facts are that Greenspan is largely responsbile for this housng mess, then Clinton, then Bush. Had the NY Times spread the blame appropriately - and taken fact-finding more seriously - perhaps their core business wouldn't be in such trouble.
Posted by Ed Mullins on Fri 26 Dec 2008 at 02:04 PM