WASHINGTON — How did it happen, America’s grave financial crisis? President Bush offered a bunch of explanations but held Washington completely blameless, painting a picture of a government standing innocently on the sidelines as the economy went off the rails.
Somehow, under Bush’s scenario outlined in his Wednesday night address to the nation, the country wound up at the precipice of “a long and painful recession” at a time when, apparently, Congress, the White House, regulators and the Fed were doing exactly what they were supposed to be doing.
Now that the economy has tanked, Bush says the federal government is responding with “decisive action.” Shouldn’t the people in charge have been doing that before everything became such a mess?
“Our entire economy is in danger,” Bush said in an address to the nation Wednesday night.
Nowhere in his 13-minute speech did the president suggest that the people in Washington who are supposed to keep an eye on the economy missed a step, failed to raise alarms or hesitated to intervene. The guilty parties in Bush’s script were overseas lenders flush with cash, American borrowers reaching for more than they could afford, easy credit terms, a banking system eager to cooperate and too much optimism about rising home values.
Bush spoke vaguely about investment banks that “found themselves saddled with” toxic assets and banks that “found themselves” with questionable balance sheets.
The economic collapse — well, it happened. “The gears of the American financial system began grinding to a halt,” Bush said, talking to the country as if he were an economics professor in a freshman course.
But now, there’s plenty of action with federal takeovers and bailouts that have reshaped America’s financial industry and left the concept of free enterprise in the dust. On Capitol Hill, key Republicans and Democrats reported agreement in principle Thursday on the outlines of a bailout package and prepared to show it to Bush for his endorsement of their changes to the plan.
Bush is a sharp-elbows politician, fiercely partisan and combative. The eight years of his presidency are filled with no-holds-barred, blame-game, finger-pointing attacks on Democrats.
But not Wednesday night. Not when Bush desperately needs Democratic votes to pass the $700 billion plan to buy distressed assets from financial institutions to shore up the banking system and unlock the nation’s severe credit crunch.
