Monday, December 01, 2008

The Bush Legacy, Pt. 1: The Economy

Nobody could've predicted civil war in Iraq the breeching of the levees the downfall of the U.S. economy! From the AP-
The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents...

Bowing to aggressive lobbying, along with assurances from banks that the troubled mortgages were OK, regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way...

The administration's blind eye to the impending crisis is emblematic of a philosophy that trusted market forces and discounted the need for government intervention in the economy. Its belief ironically has ushered in the most massive government intervention since the 1930s.

Heckuva job, Bushies!

And the coda from the banking industry itself-
Many of the banks that fought to undermine the proposals by some regulators are now either out of business or accepting billions in federal aid to recover from a mortgage crisis they insisted would never come. Many executives remain in high-paying jobs, even after their assurances were proved false.

The invisible hand of the free market scores again!

And yet, despite all of this, our country's political culture is so frightened of right-wing bullies and ideologues, that Barack Obama, with his mandate and popularity, couldn't risk a political fight by appointing even one single measly liberal (like this guy for instance) to his economic team, instead crafting a team of experienced, centrist hands. As with the Iraq debacle, getting it right versus getting it wrong has no real impact on whether you are put in a position of power or respect. There is something very, very wrong with this.

This is beginning to change, of course, but it remains a frustrating trend.

[UPDATE: To be fair, here is another guy who got it right.]

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