Herron: Bush undeservedly bashed

‘ ‘ ‘ History shows that presidents are often exorbitantly praised during prosperous times and… ‘ ‘ ‘ History shows that presidents are often exorbitantly praised during prosperous times and undeservedly blamed during perilous times. Regarding current economic woes, former President Bush is a victim of the latter. ‘ ‘ ‘ ‘ ‘ ‘ Immediately before a vote on the Troubled Asset Relief Program, House Speaker Nancy Pelosi ‘mdash; in a fit of political amateurism ‘mdash; chided the Bush legacy and its ‘reckless economic policies’ as the cause of the current mess. ‘ ‘ ‘ ‘ ‘ ‘ President Obama uttered the phrase ‘same failed economic policies’ so many times while campaigning it could have been a slogan. Even former President Carter blamed our 43rd president when he told reporters in Brussels that ‘the atrocious economic policies of the Bush administration’ were behind the crisis. Bush’s free-market principles ‘mdash; conspicuously absent during his eight years in office ‘mdash; are, according to such critics, the source of the economic turmoil. ‘ ‘ ‘ ‘ ‘ ‘ Reality, however, stands at a great distance to this indictment. The president does not run the economy. Rather, 300 million individuals run it. These individuals, acting collaboratively, often fall victim to the perils of human fallibility. ‘ ‘ ‘ ‘ ‘ ‘ Obama implicitly recognized this in his inaugural address, describing our weakened economy as ‘a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices.’ Of course, the housing bubble is at the root of this entire crisis. ‘ ‘ ‘ ‘ ‘ ‘ Millions of Americans, falling victim to the lures of rising house prices, bought a home ‘mdash; then they bought another, and maybe a third. Elevated by demand, prices continued their ascent, and nobody asked questions. Then the bubble popped, and the economy fractured. ‘ ‘ ‘ ‘ ‘ ‘ Swallowed by a wave of toxic loans and credit default swaps, the staples of American finance began to topple last fall. Most were mismanaged, others were simply greedy. Bush was never a consultant for any of these firms during his presidency. Economists still debate the causes of the housing and financial crisis. ‘ ‘ ‘ ‘ ‘ ‘ Deliberation over the best means to solve the current fiasco is equally inconclusive. Economic issues remain frustratingly complex. The lesson: Not even the most omniscient of governments can fully understand the mechanisms of an economic system. ‘ ‘ ‘ ‘ ‘ ‘ But Bush made an effort to regulate ‘mdash; he wanted more government oversight. In September 2003, Bush proposed intensified oversight of the now infamous Fannie Mae and Freddie Mac. According to The New York Times, the two government-sponsored enterprises were responsible for ‘roughly half of the nation’s $12 trillion mortgage market.’ House Financial Services Committee Chairman Barney Frank, D-Mass., opposed such oversight. Rep. Frank, according to The New York Times, said, ‘The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.’ Essentially, if officials were permitted to ask questions, the government might have had to curtail its policy of artificially inflating the supply of houses through subsidies. ‘ ‘ ‘ ‘ ‘ ‘ The regulators, according to Frank, were not to be regulated. One of the most significant pieces of deregulatory legislation in recent years passed during the final weeks of President Clinton’s administration. ‘ ‘ ‘ ‘ ‘ ‘ According to economist Tyler Cowen, the Commodity Futures Modernization Act of 2000 ‘limited the ability of the federal government to regulate [over-the-counter] derivatives.’ ‘ ‘ ‘ ‘ ‘ ‘ But the fable will continue as is: Bush simply deregulated too much. What exactly he deregulated, nobody has told us. ‘ ‘ ‘ ‘ ‘ ‘ How the deregulation brought about the crisis, nobody seems to know. Few government officials, if any, were even able to point out the emergence of a crisis before it occurred. ‘ ‘ ‘ ‘ ‘ ‘ The moral is that, yes, markets do fail. Smart people make poor decisions and give bad advice, and sometimes regulation is more or less irrelevant. We have come to terms with the idea that certain events are simply uncontrollable. We do not blame presidents for disease or Third-World poverty. ‘ ‘ ‘ ‘ ‘ ‘ Therefore, the organic failure of an economy deserves similar consideration. ‘ ‘ ‘ ‘ ‘ ‘ The Bush years contained all the ingredients of a disappointing administration, but the financial crisis is not a result of that mix. ‘ ‘ ‘ ‘ ‘ ‘ Sure, Bush did not do a lot right, but he did not do everything wrong either. ‘ ‘ ‘ ‘ ‘ ‘ E-mail Mason at mph20@pitt.edu.