WASHINGTON : "We can put light where there's darkness, and hope where there's despondency in this country. And part of it is working together as a nation to encourage folks to own their own home." — President George W. Bush, Oct. 15, 2002
The global financial system was teetering on the edge of collapse when President George W. Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, "scared the hell out of everybody."
It was Sept. 18. Lehman Brothers had just gone belly-up, overwhelmed by toxic mortgages. Bank of America had swallowed Merrill Lynch in a hastily arranged sale. Two days earlier, Bush had agreed to pump $85 billion into the failing insurance giant American International Group.
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Bush, according to several people in the room, paused for a single, stunned moment to take it all in.
"How," he wondered aloud, "did we get here?"
Eight years after arriving in Washington vowing to spread the dream of homeownership, Bush is leaving office, as he himself said recently, "faced with the prospect of a global meltdown" with roots in the housing sector he so ardently championed.
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"The Bush administration took a lot of pride that homeownership had reached historic highs," Snow said in an interview. "But what we forgot in the process was that it has to be done in the context of people being able to afford their house. We now realize there was a high cost."
For much of the Bush presidency, the White House was preoccupied by terrorism and war; on the economic front, its pressing concerns were cutting taxes and privatizing Social Security. The housing market was a bright spot: ever-rising home values kept the economy humming, as owners drew down on their equity to buy consumer goods and pack their children off to college.
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Today, millions of Americans are facing foreclosure, homeownership rates are virtually no higher than when Bush took office, Fannie and Freddie are in a government conservatorship, and the bailout cost to taxpayers could run in the trillions.
As the economy has shed jobs — 533,000 last month alone — and his party has been punished by irate voters, the weakened president has granted his Treasury secretary extraordinary leeway in managing the crisis.
Never once, Paulson said in a recent interview, has Bush overruled him. "I've got a boss," he explained, who "understands that when you're dealing with something as unprecedented and fast-moving as this we need to have a different operating style."
Paulson and other senior advisers to Bush say the administration has responded well to the turmoil, demonstrating flexibility under difficult circumstances. "There is not any playbook," Paulson said.
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Last week, Fox News asked Bush if he was worried about being the Herbert Hoover of the 21st century.
"No," Bush replied. "I will be known as somebody who saw a problem and put the chips on the table to prevent the economy from collapsing."
But in private moments, aides say, the president is looking inward. During a recent ride aboard Marine One, the presidential helicopter, Bush sounded a reflective note.
"We absolutely wanted to increase homeownership," Tony Fratto, his deputy press secretary, recalled him saying. "But we never wanted lenders to make bad decisions."
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here's the link : http://www.iht.com/articles/2008/12/21/business/21admin.php?page=1
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