Sunday, December 21, 2008

How Bush Pushed Housing Heroin

If he were still with us, our departed president might be trying to figure out how he made this mess. But as his ghostly presence emanates interviews and speeches about how he stuck to his principles in the face of reality, journalists are piecing together the tale of the Bush housing bubble that has now splattered over the world economy.

"White House Philosophy Stoked Mortgage Bonfire" is the headline in today's New York Times over a 2002 picture of a smiling George W. Bush selling his new plan for minority home ownership against a backdrop of "A Home of Your Own" logos, the domestic equivalent of "Mission Accomplished" in Iraq:

"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...

"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."

In effect, the President became the pusher-in-chief for a housing heroin cartel of banks, mortgage brokers and Wall Street sharks that was hooking millions of Americans with nothing-down, low-start variable rate loans that would get them high on home ownership and send them crashing when inflated prices inevitably started falling.

The Times takeout is full of head-shaking statements by the "experts" who helped him foster and for years ignore the growing bubble, but it ends with an image that sums it all up:

"With 31 days left in office, Mr. Bush says he will leave it to historians to analyze 'what went right and what went wrong,' as he put it in a speech last week to the American Enterprise Institute.

"Mr. Bush said he was too focused on the present to do much looking back.

“'It turns out,' he said, 'this isn’t one of the presidencies where you ride off into the sunset, you know, kind of waving goodbye.'”

But that is exactly what George W. Bush will be doing next month as he leaves behind a nation in the throes of financial withdrawal and heads, smiling and sober, for the two homes he owns free and clear in Texas

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