Sunday, September 21, 2008

Campaigning for Re-Election on the Backs of the Poor

I don't claim to be an expert about the current economic crisis, but this piece, taken from the comment section at Media Matters does explain the situation well.

Flashback: In 2004 Bush Campaigned For Re-Election On The Backs Of Subprime Mortgages

During the 2004 campaign, President Bush declared his pride in making America what he called “an ownership society.” He promoted expanding home-ownership as the best way to ensure a strong economy, campaigning constantly on the idea:

5/6/04: “Thanks to being the most productive workforce in America, and I might say, thanks to good policies, this economy is strong and it’s getting stronger. … Home sales were the highest ever recently. That’s exciting news for the country.”

8/28/04: See, I love an ownership society. It’s a hopeful society. It’s a society that provides stability in times of change.

8/9/04: If you own your own home, and building equity in your own home, and you’re changing from job to job, it provides great security and relief.

8/6/04: Home ownership is at an all-time high now in America. That’s fantastic news. Isn’t it wonderful to have somebody for the first time be able to say: welcome to my home; I’m glad you’re here at my piece of property.

Of course, what the current enormous crisis — rooted in subprime mortgages — proves is that promoting home ownership without regulatory safeguards is inherently risky. As economist Paul Krugman explained, “[B]orrowing to buy a home is like buying stocks on margin: if the market value of the house falls, the buyer can easily lose his or her entire stake.” And that’s just what happened: More homeowners now owe more money than their homes are actually worth, while foreclosure filings in August rose 12 percent from July — and represented a 27 percent increase from Aug. 2007.

Further, the quest for an all-encompassing ownership society led to the policies that have created the crisis. From dramatically low interest rates to ignoring the warnings about predatory lending to quashing state regulations that would have helped prevent such massive Wall Street investment in subprime loans, Bush and his allies built an economy on a house of cards that was bound to collapse.

Today, Bush declared, “There will be ample opportunity to debate the origins of this problem.” That debate will need to focus on his own failed promise of an “ownership society” as an economic panacea.


capper said...

Campaigning for re-election on the backs of the poor.

Sounds like Scott Walker's next governor's run to me.

Thurmlee said...

And this explains why the Obmanination received more money from Fannie Mae and Freddie Mac than anyone else in congress, since he has been in Washington except the chair of the Senate Banking Committee?

Other Side said...

Receiving money (which is not terribly unusual in Congress) and being the architect of the bankruptcy of thousands are entirely different matters.

Dad29 said...

Bush's rhetoric was asinine then, and is asinine now.

But Congressionally-mandated low-doc/no-doc mortgages are just as asinine--and it was Democrats who decreed that banks MUST make those loans.

No way around that, fella.

Other Side said...

Remember, daddio, it was a Republican-led Congress. But I'll agree the Dems certainly must share some blame. In the end, it's greed that's fueled this engine.

And now we're going to get the shaft for the sins of others. What's pathetic is all those greedy bastards are going to walk away from this. I'll join you in your revolution.