Bush's Speech

Good explanation of how we got into the crisis, but did not lay the responsibility on anyone.

Fire the sound guy who let that mic rub and squeak the whole time.

So he has invited Obama and McCain to DC tomorrow. I guess that makes them free to debate on Friday…

In short…meh.

No, it was the poor people getting loans from good bankers that kicked it all off.

He forgot the part about the low interest rates after 9/11 changed everything.

The speech gave pretty good explanations for what it was and might keep some people from panicking over their savings account. He didn’t lay the blame anywhere but I didn’t expect him to and I don’t think that was the point.

Stylistically it was one of the better ones he has given. If he always spoke like that he’d not get made fun of so much or at least it’d be for different reasons.

There was an awful lot of technical detail about arcane financial instruments that will go right over the heads of many people. When he was explaining how people stopped paying their mortgages and mortgaged backed securities lost value, leading to a glut on the market, I was thinking he needed a good analogy, like:

“You know how when your neighbor signs up with Amway and starts sellin’ soap, and then he gets the whole neighborhood to sign up with Amway and they start sellin’ soap, and suddenly everybody has more soap than they know what to do with, and nobody can sell their soap anymore, because there’s just too much darn soap in the neighborhood? The economy is kinda like that right now.”

I think he could have sold it like that.

Well this is one of the few speeches where he has not had to say “nucular”.

It’s a crying shame that it’s taken Bush 7 years to learn how to be a not altogether awful president. If the election was Bush vs. McCain today, I’d vote for Bush, and I’m saying that as an Obama supporter.

Palin does though.

I agree this was perhaps his best effort, or at least the best one I’ve seen. I was actually able to watch it without cringing in embarrassment or boiling with rage. Kudos to the writers and whoever coached him.

As a guy who, due to a mostly gone speech impediment, has to seriously make an effort to properly pronounce his own last name* that is the one thing about his speaking I’ve never had an issue with. He just usually seems…smarmy, but here he seem like an actual president.
*Yeah I looove introductions. Hi, I’m Caveat Lector! No…Lector. Lector… Lector!.. sigh That’ll work…

Bush actually deserves a lot of credit for trying to work this problem a long time ago. The Bush administration has issued a dozen warnings about Fannie Mae and Freddie Mac, starting in 2003. The Treasury Secretary went to Capitol Hill multiple times to lecture them on the need to reform financial regulations. Bush’s 2005 budget has a section in it that specifically says that Fannie Mae and Freddie Mac are a threat to taxpayers and need more oversight.

The Clinton administration also tried to get Congress to move on this.

Unfortunately, it’s Congress that writes the laws, and they chose to do nothing. This is why Congress deserves its near-single-digit approval ratings. And both parties in Congress are to blame.

And also unfortunately, even though Congress as a whole is despised by the American people, gerrymandering and other incumbent advantages means that the vast majority will be re-elected.

Place your right hand in the air and your left hand on the hockey puck, and repeat after me:

I, Sam Stone, solemnly swear on Anne Murray’s ass, that I sincerely believe that George W. Bush did everything a President ought to do in terms of his duty, in regard to this crisis. And I further believe that he exhausted every effort, and every weapon in his vast presidential and intellectual armory, to avert this situation.

How about I let Bush to the talking? This is what the administration did over the past 7 years:

That’s just the stuff on the record. His administration also lobbied behind the scenes, pushing Congress to act.

And guess who the big stumbling blocks were this time around? The Democrats. Chris Dodd opposed Bush every time. He issued statements that there was nothing wrong with Fannie and Freddie. He lobbied to kill every reform bill that came along. After he controlled the banking committee, it no longer even had hearings on Fannie and Freddie. Last year, Dodd lobbied to have Fannie and Freddie’s credit limits raised so they could expand even more.

Hillary Clinton’s campaign had a plan to increase the number of mortgages Fannie and Freddie should give out. She wanted to ‘fix’ the housing crisis by making credit even more available.

Barack Obama wanted to take $500 million a year out of Fannie and Freddie’s liquid assets and use it to build 14,000 low income homes a year across the U.S.

Barney Frank repeatedly issued statements that not only were these institutions sound, but even if they were to fail no one should worry because there was no way in hell Congress would bail them out. He called Bush’s request to reform them ‘inane’.
Compare and Contrast.

From Wiki:

“U.S. presidents Dwight D. Eisenhower, Jimmy Carter, Bill Clinton, and George W. Bush have all used this pronunciation.”

[bolding mine]

Cite, scroll to “Usage by politicians.”

Wow! One of his best speeches? Did you guys hear the same speech I did?
Or, rather, he put two statements right up against each other and implied that they were related. We’re going to buy distressed mortgage-backed securities. In a completely unrelated note, Americans have historically tended to pay back their mortgages. When this bill passes, the American citizens will be buying back the worst and most risky debts. The bankers will have no reason to pick the best CDOs and give them to John Q Public; they’re going to be offering up the ones that are worth the least.

Bush has an MBA from Harvard, so I’m granting that he’s an intelligent, savvy fellow. That being the case, his statement that the American public will see any of this money come back is a Lie. He looked in your face and lied. He said he’d have rather had the businesses fail because he’s a fiscal conservative, and that was a lie as well. Our free market was riding merrily along, running with the sublime smoothness that only a free market can enjoy until the middle of last week, when all of a sudden, in ways no one on earth could have ever predicted, the US banking system seemed to reach a crisis. His statement last week was that he did not see any problem until the crisis happened just last week. I can’t believe that he would be that stupid, so he must have known that everything was falling apart. Saying that he realized it last week was a lie. This is another made-up crisis to force Congress to give the Fed unlimited power to do anything it wants, and what he wants is for the financial institutions to get back to business as normal.

In the second draft of this legislation, Bernanke actually changed the language to go beyond real estate CDOs and cover any troubled debt instruments. Citibank, Sears, GM, they all have bad debt to sell us, and we’re about to very selectively buy the worst of the worst debt.

If we were buying an ETF that represented all mortgages everywhere, we might be able to believe that the “historical” behavior of the debtors might apply, but that’s not what we’re going to get! They are going to buy the crappy debts that the financial institutions want to bury under a rock behind the tool shed, not the good debts. They know which is which, and by definition they will not be selling us any of this “good debt.” This $700B is not being offered to the banking industry to help relieve them of their good debt instruments; it’s being offered to them so they can unload the shittiest of their troubled asset instruments.

And you know what? Everyone who signed up for mortgages they could never repay will have no reason at all to continue paying. Why bother? It’s the US Government, and the US Government won’t be evicting anyone. They’ll just write each one off as another few hundred thosand dollars spent on a social welfare program, and any of use who get W-2s at the end of the year will be paying.

So, I didn’t get the memo. Just how did anyone come to the conclusion that as of mid-September 2008, Bush decided to start speaking the truth?

I think the Bush administration has done a reasonable job with this crisis so far but let’s not pretend that his statements about Fannie and Freddie had anything much to do with the sub-prime problem. The two GSE’s had a fairly minor role in the sub-prime market and the crisis would have happened even if they didn’t exist. If there are warnings by Bush about the actual source of the problem: sub-prime loans and their securitization before the crisis that would be impressive.

In case anyone missed it, Sam is quoting verbatim this White House press release. I’m not criticizing, just clarifying.

Well, yeah, Groo, they’re mostly worthless, but everybody gets a share!

Sure, that’s how we know we’re getting the straight facts, right from the horse’s, ah, mouth.

No they are not worthless. Many of them have good loans buried inside, and even the bad ones have the price of the house behind them. The real question is what gets paid for them. If the government hangs on to these things until the market recovers, they might actually make a profit, and especially if they get a stake in the banks. In the short run it’s going to cost, but in the long run it might work out.