It’s sad. So sad.
It’s a sad, sad situation.
And it’s getting more and more absurd…
Oh, it seems to me,
that ‘sorry’ seems to be the hardest word.
Elton John, “Sorry Seems to be the Hardest Word”
Absurd. That seems like an appropriate word as we watch the “W” era wind down, as the perenially blameless commander in chief dons his usual “What, me worry?” grin while slathering himself with teflon. Because being George W. Bush has always meant never having to say you’re sorry.
Until now. And, still, not quite.
He is sorry in his own way, though.
President George W. Bush expressed remorse that the global financial crisis has cost jobs and harmed retirement accounts and said he’ll back more government intervention if needed to ease the recession.
“I’m sorry it’s happening, of course,” Bush said in a wide-ranging interview with ABC’s “World News,” which was airing Monday. “Obviously I don’t like the idea of people losing jobs, or being worried about their 401(k)s. On the other hand, the American people got to know that we will safeguard the system. I mean, we’re in. And if we need to be in more, we will.”
The U.S. economy fell into a recession in December 2007, the National Bureau of Economic Research reported on Monday. Many economists believe the current downturn will last until the middle of 2009 and will be the most severe slump since the 1981-82 recession.
…As he leaves office, Bush said he felt responsible for the economic downturn because it’s occurring on his watch, but he added: “I think when the history of this period is written, people will realize a lot of the decisions that were made on Wall Street took place over a decade or so” before he became president.
It reminds me of lines uttered by two of my favorite television characters: Homer and Bart Simpson.
7. Six sentences will help you get by in life.
From Homer: “Cover for me. Oh, good idea boss. And, it was like that when I got there.”
From Bart: “I didn’t do it. Nobody saw me do it. You can’t prove anything.”
Well, technically he’s right. Much of it was like that when he got there. Glass-Steagall fell in 1999, bumped off by a Republican congres on Bill Clinton’s watch. Phil Gram delivered his masterstroke, ensuring that derivatives and credit swaps would stay unregulated, in the waning days of the Clinton Administration. And conservatives were pushing back against post-Great Depression regulations, designed to prevent another crash, in the early 1970s.
But that doesn’t get Bush off the hook, because the same conservatism and free-market fundamentalism he championed as late as mid-November. Uttering, with a straight face, lines like this to an audeince that was considerably less than amused.
In a defiant declaration in his waning days as president, Mr. Bush traveled to Wall Street — ground zero for a financial crisis that has spread around the globe — to declare that the American system is still “the engine of social mobility” and deliver an apparent warning to the world’s leaders, and the incoming Obama administration, not to draw the wrong lessons.
Mr. Bush suggested those making arguments for ambitious new forms of regulation — he did not name them, but they include his French counterpart, President Nicolas Sarkozy — were sorely mistaken.
“The crisis was not a failure of the free-market system, and the answer is not to try to reinvent that system,” Mr. Bush said, in a 24-minute speech at Federal Hall in downtown Manhattan.
…But any discussion of root causes could easily turn into finger-pointing at Mr. Bush and his administration; the Russian president, Dmitri A. Medvedev, has been quite outspoken in saying the United States is to blame. And as Mr. Bush’s speech in New York demonstrated, the president is trying hard to push back against the idea, advanced by Mr. Sarkozy and others, that a much stronger international regulatory regime is necessary.
“We must recognize that government intervention is not a cure-all,” Mr. Bush said, adding, “History has shown that the greater threat to economic prosperity is not too little government involvement in the market, but too much.”
The problem is that, while a lot may have been “like that when he got there,” Bush and his admnistration did little to fix what was broken, refused to act when warned, and in some cases stopped others from preventing disaster.
A review of regulatory documents shows that the Bush administration did little to stop the crash, and may have even greased the runway.
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.
“We’re going to be feeling the effects of the regulators’ failure to address these mortgages for the next several years,” said Kevin Stein of the California Reinvestment Coalition, who warned regulators to tighten lending rules before it was too late.
And those banks? Well, many of them don’t exist anymore, or are being bailed out — Countrywide Inc., Lehman Brothers, IndyMac, etc. (And their executives remain in high-paying jobs, despite their performances.)
One regulator in particular stands out, as it became the regulator of choice from some banks that have gone to the great beyond.
When Countrywide Financial felt pressured by federal agencies charged with overseeing it, executives at the giant mortgage lender simply switched regulators in the spring of 2007.
The benefits were clear: Countrywide’s new regulator, the Office of Thrift Supervision, promised more flexible oversight of issues related to the bank’s mortgage lending. For OTS, which depends on fees paid by banks it regulates and competes with other regulators to land the largest financial firms, Countrywide was a lucrative catch.
…OTS is responsible for regulating thrifts, also known as savings and loans, which focus on mortgage lending. As the banks under OTS supervision expanded high-risk lending, the agency failed to rein in their destructive excesses despite clear evidence of mounting problems, according to banking officials and a review of financial documents.
Instead, OTS adopted an aggressively deregulatory stance toward the mortgage lenders it regulated. It allowed the reserves the banks held as a buffer against losses to dwindle to a historic low. When the housing market turned downward, the thrifts were left vulnerable. As borrowers defaulted on loans, the companies were unable to replace the money they had expected to collect.
This is the same OTS, by the way, that
William Grieder said it best. As we sit perched atop what looks like a long and well-greased economic slide — far enough that we’ll need to pass through the clouds before we can see the ground speeding towards us — an apology would be nice.
The arresting image of Treasury Secretary Paulson genuflecting before House Speaker Nancy Pelosi sent gasps and titters through the corridors of power in Washington. Strong leaders do now bow before rivals, especially a woman. This was a droll gesture–Paulson’s way of pleading with the Democratic leader not to blow up the bipartisan deal they had negotiated for the massive bailout of the financial system. “I didn’t know you were Catholic,” Pelosi responded in kind. It was not Democrats, she pointed out, but Paulson’s own Republicans who threatened to sink the grand rescue plan.
The incident reminded me what is missing in this financial storm–any hint of contrition. The spectacle I want to see is powerful and self-important leaders getting down on bended knee and asking the country’s forgiveness.
Henry Paulson could offer apologies for Wall Street and also for the Bush administration’s lackadaisical response to the spreading financial contagion. He is not alone.
None will be forthcoming, of course least of all from a president whose congenitally incapable of admitting he’s done anything to be sorry for, and a movement that’s just as incapable of being sorry for the consequences of its philosophy and policies.
Conservatism has become obsolete. Social progress and the practicalities of governance have revealed the fundamental and fatal flaws of conservative thought. Conservatives today are like followers of a religious cult milling about confused the day after their leader’s prediction of Armageddon failed to materialize. The immediacy of the problem is clear as normal life goes on. The failure reveals a fundamental flaw in the sect’s belief system, but the failure simply cannot be denied in the light of the new day’s dawn.
Republicans face a similar dilemma trying to justify the abject failure of their founding ideals in the face of a confounding reality — the success of liberalism. Like cult members who sold all worldly possessions in anticipation of the Rapture, Republicans stand naked in the cold wind of change, grasping for a way to explain away their failed vision for the future. A clear sign of decay is their desperate appeal to twisted and contorted logic to shore up the movement’s crumbling foundation. This becomes starkly evident in the Wall Street bailout through the Troubled Asset Relief Program (TARP), an effort inspired and implemented by a Republican administration and supported by a critical mass of conservative allies on the Hill.
…Republicans have failed not because of poor execution, but because they are acting on a philosophy deeply and fundamentally flawed. Without conservatism, we would not have benefitted from the American Revolution or had to suffer the horrors of the past eight years under George Bush. Without liberalism, blacks and whites would remain segregated; women would not vote; blacks would not vote; we would have little or no religious tolerance and our civil rights would be threatened, just as we see happening under Bush. That is the ugly world that conservatism sought to protect from change. In the history of our great republic, only liberalism pushed us toward greater enlightenment from the dark days of bigotry and intolerance. Conservatism, protector of the status quo, resisted the very changes we now take for granted, proving the ideology as wrong then as it is now.
When you believe the “world as it is” is “the world as it must be” — and what must be must also never change— the hardest thing do is to admit that the world has change, and that you were wrong about how it must be.
Maybe it’s the second hardest thing, after owning up to your part in making the world as it is, thus putting the world as it could be or should be that much farther beyond our reach.
Or maybe it’s not hard at all, if you’ve got nothing to be sorry for anyway.