The roundtable on Monday night's Special Report with Brit Hume on FNC was not kind to the New York Times's hit piece on Sunday's front page that blamed President Bush and only Bush for the mortgage meltdown, ignoring the Democrats in Congress who protected the irresponsible push for more "affordable housing" by Fannie Mae and Freddie Mac (as Times Watch noted yesterday).
Nina Easton, Washington bureau chief of Fortune magazine, pronounced herself "flabbergasted when I read this story, flabbergasted....You cannot write a story about affordable housing policies and blame it on George Bush instead of the Democrats. I mean, it’s just, it’s outrageous."
From the Monday night Special Report with Brit Hume:
BRIT HUME: So what is it exactly, what did this story that's so agitated the White House that not only did it send a Sunday response in the form of a statement, but also sent, as you saw there, Ed Gillespie, the President's political advisor, out on the North Lawn to talk about it again today. Well, the story says, in part, quote, He, speaking of President Bush, his housing policies and hands-off [approach] to regulation encouraged lax lending standards. He pushed hard to expand home ownership, especially among minorities, an initiative that dovetailed with his ambition to expand the Republican tent, and with the business interests of some of his biggest donors. Well, that statement is, is correct. So what's all the grumbling about? Some thoughts on this now from Fred Barnes, executive editor of the Weekly Standard; Nina Easton, Washington bureau chief of Fortune magazine; and the syndicated columnist Charles Krauthammer, Fox News contributors all. Fred, what's the, that quote I read, which lies at the heart of what the Times claimed, is, standing by itself, correct, so what's the fuss about?
FRED BARNES: Well, it is, but, it is correct, but I'll mention the program and the President's efforts to increase home ownership. Look, the problem with the story is it blames everything on President Bush and pretends like nothing happened before he became President. And, you know, you can go back to the Community Reinvestment Act under President Carter and all the things that President Clinton did and what Fannie Mae did announcing in 1999 that they would buy up home loans that were made by banks to people who hadn't qualified before, meaning they didn't have much, they weren't going to be able to put much down, and couldn't provide much proof that they were going to be able to pay off their home loan and so on. And then you go to 2003 and ‘04 and ‘05 and, as Ed Gillespie says, the Bush administration was pushing hard for a tough crackdown on the practices of Fannie Mae and Freddie Mac and so on. I mean, it was just one of the most breathtakingly narrow-sided story with blinders on that I've ever seen before that can only be motivated by an effort to get President Bush. I mean, you wouldn't write that piece otherwise. Look, it's not that the Bush administration bears none of the blame. They do bear some. But this story is utterly ridiculous. When I was writing a book about President Bush, oh, when was it, couple of years ago, and I wrote a chapter on the ownership society, and so I looked into the home ownership program that the Bush administration had. It was puny. It wasn't much at all. It barely mentioned it, my chapter on the ownership society, and one of these pieces I read today said that that was the core of the ownership society idea of the Bush administration. No it wasn't. You know, Social Security investment accounts and so many other things were. It wasn't. So the problem with this story is it blames a person who is only partly, and smaller than other people, to blame and mentions no one else.
HUME: Nina?
NINA EASTON: Well, as somebody who is not part of Fred's, sort of, media blame club, usually, I have to say I was flabbergasted when I read this story, flabbergasted. I mean, there are three sections to blame for this crisis we're in. You can blame Alan Greenspan and the Federal Reserve, easy money supply. You can blame this whole risky slice, dice and pass mortgage up the food chain so no one has responsibility for it, and, frankly, regulators should have been looking at that. You can blame that. And you can blame affordable housing policies. You cannot write a story about affordable housing policies and blame it on George Bush instead of the Democrats. I mean, it's just, it's outrageous. You cannot go through, as Fred said, and, I mean, the Democrats were so tied to Fannie Mae and Freddie Mac, in 1999, the Clinton administration pressured Fannie Mae to get into this more risky business of affordable housing, meaning you give loans to people who can't afford it. You take the normal credit, normal lending standards off the table. People don't have to have the required income and so on, so that you can expand affordable housing. And in the New York Times article at the time, it said this is going to lead, this could lead to a savings and loan crisis. Every Bush administration official I've interviewed in the past couple of years has always pointed to Fannie Mae and Freddie Mac being out of control, we need to rein them in, and they couldn't get the Democrats to do it.
CHARLES KRAUTHAMMER: The only surprise I had in reading this was why it took the Times so long to get around to blaming the entire collapse on George Bush. After all, they blamed everything else on Bush, I mean, from, you know, the droughts in Kansas to Hurricane Katrina. Look, the truth is that there are two realities here. One is that we set as a national goal 30 years ago expanding home ownership, especially for low-income and minorities, and it was accelerated in the Clinton administration, and the Bush administration, Bush, who defined his ideology as "compassionate," continued it. And the other truth is that in his administration he continued but he did try to regulate the out of control Fannie and Freddie, who were really at the root of this explosion. We had Franklin Raines in 1999, the CEO at the time, boasting that they had lowered the down payment requirements and were now going to lower the interest rates paid by these lower income subprime people, which was obviously a huge risk, and it was ignored, and it led ultimately to the calamity that we're in today.
