While President Bush is frantically making the media rounds trying to spin a positive legacy out of whole cloth, he and his administration are continuing their war with the New York Times. This time the administration is accusing the newspaper of liberal bias because of a front page story about the causes of the mortgage crisis.
The newspaper’s story lays most of the blame for the financial crisis at the feet of the Bush administration, who they claim opposed regulation, and was asleep at the wheel while the crisis was building. In a statement Press Secretary Dana Perino played the liberal bias card, “The Times’ ‘reporting’ in this story amounted to finding selected quotes to support a story the reporters fully intended to write from the onset, while disregarding anything that didn’t fit their point of view.”
Perino defended the administration’s anti-regulatory stance, “The Times story frequently repeats a charge by the Administration’s critics: a ‘laissez faire’ attitude toward regulation. We make no apology for understanding the concept of regulatory balance. That is, regulation should be stringent enough to protect the greater public good and safety but not overly strong so that it unnecessarily inhibits innovation, creativity and productivity gains that are the sole source of increasing Americans’ standards of living.”
The administration also pulled out one of their favorite excuses. They blamed Congress and the Democrats, “The story also gives kid glove treatment to Congress. While the Administration was pushing for more transparent lending rules and strengthening oversight and supervision of Fannie and Freddie, Congress for years blocked attempts at stronger regulation and blocked reform of the Federal Housing Administration.”
The statement stuck with the party line story that the crisis begins and ends with the Democrats and Fannie and Freddie, “Democratic leaders brazenly encouraged Fannie and Freddie to loosen lending standards and instead encouraged the housing GSEs to play a larger and larger role in the housing market — even while explicitly acknowledging the rising risks. And while the story notes the political contributions of some banks to Republicans, it neglects that political contributions from Fannie Mae and Freddie Mac overwhelmingly supported Democratic officials — in particular the chairmen of the banking committees.”
The press secretary wrapped up with the failures in the Times story, “There are many more reporting failures in this story — failure to consider the impact of monetary policy; ignoring the regional nature of housing markets; and ignoring the Bush Administration’s historic proposal to overhaul the nation’s regulatory system, for example. But then a review of these issues would wave complicated the reporters’ myopic point of view that only Bush Administration policies could possibly be responsible for the housing and finance crises.”
The New York Times story is far from perfect. It pretty much ignores the fact that many of the problems that came home to roost in mortgage lending began in the Clinton administration, but it was the Bush White House, and their ownership society campaign that ramped up the Clinton policies.
More does need to be written about the role of Congress, but the White House has it all wrong.
Bush did try to strengthen regulations, probably too late, but he was blocked not by Democrats, but by Senate Republicans who chose to defend their anti-regulation ideology at all costs. The White House is trying to pass blame for this problem to the Democrats, but they ignore the fact that Republicans controlled Congress, and they created the environment that allowed this crisis to occur.
The truth is that there is enough blame for all sides on this issue. Both Democrats and Republicans embraced the housing bubble, and Perino’s statement is nothing more than an attempt at legacy definition. This seems like an odd time for an administration that is on their way out the door to be complaining about the media, but the Bush administration is sensitive about their legacy, and they likely view the Times story as a personal shot at them.