George Bush on the mortgage crisis: How did we get here?
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?"
In the article from today's NYT, the reporters argue that Bush's commitment to 1) expanding home ownership and 2) deregulating markets led his administration to adopt policies that directly encouraged the real estate bubble and subsequent crash. While report acknowledges that Bush now takes the crisis very seriously and is taking aggressive action, it cites evidence that the administration ignored the warning signs for much too long.
Highlights after the jump
