Bush Admits Free Market Failures Even As He Touts Free Market Housing Solutions

Just yesterday, a new report revealed that home foreclosure rates in February had skyrocketed 60 percent from the same month last year. The amount of equity Americans own in their homes plunged to lows not reached since 1945; and home sales remain at near record low levels.

Yet throughout this crisis, Bush has refused to lend homeowners a helping hand. In fact, he has repeatedly insisted that homeowners are at fault for intentionally buying homes they could not afford:

“It’s not the government’s job to bail out speculators or those who made the decision to buy a home they knew they could never afford.” [8/31/07]

Some borrowers took out loans they knew they could not afford. … We should not bail out lenders, real estate speculators or those who made the reckless decision to buy a home they knew they could never afford.” [12/6/07]

However, in a Friday speech to the Economic Club of New York about the state of the economy, Bush admitted that some of the borrowers now facing foreclosure may have been confused about the terms of their loans:

These mortgage agreements can be pretty frightening to people; I mean, there’s a lot of tiny print. And I don’t know how many people understood they were buying resets, or not. … And to the extent that these contracts are too complex, and people made decisions that they just weren’t sure they were making, we need to do something about it.

Watch it:

Unfortunately for homeowners, however, Bush’s shift is no more than rhetorical. Even as the Federal Reserve was in unprecedented negotiations to bail out giant Wall Street firm Bear Sterns, Bush refused to grant similar help to struggling homeowners. “In a free market, there’s going to be good times and bad times,” he said flatly. “That’s how markets work.”