Today, President Bush gave his first substantial comments on the current economic crisis, trying to reassure the American public that his administration has a plan to get through it. Toward the conclusion of his speech, he cited the financial crisis in the same breath as terrorist attacks and natural disasters:
We’ve seen that resilience over the past eight years. Since 2001, our economy has faced a recession, the bursting of the dot-com bubble, major corporate scandals, an unprecedented attack on our homeland, a global war on terror, a series of devastating natural disasters. Our economy has weathered every one of these challenges, and still managed to grow.
Nearly three quarters of a century after the 1929 crash, George W. Bush began gathering his economic advisors to prepare the policy agenda for his incoming administration. There seemed to be little appreciation of the lessons of either Henry Ford or the Great Depression. The first orders of business were massive tax cuts focused heavily on corporations and the highest income individuals to foster economic growth through assistance to the “supply side” of the economy.
But not only did the Bush administration push these destructive policies, officials failed to step in and aggressively address the financial crisis’s warning signs. Stephanie Pomboy, the founder of the economic consulting firm MacroMavens, works in forecasting the housing and credit crises. She told Barron’s:
[W]e can’t resist pointing out had Paulson and his bailout crew used their powers for ‘good’ from the get-go, they could have saved a lot of time, energy and, most importantly, money. Had they simply established a fund to buy up the surplus housing inventory, presently valued at just over $1 trillion, they could have stitched up this wound for less than they’ve spent layering Band-Aid after Band-Aid on top of it.
Unfortunately, the only way the current situation can be compared to a natural disaster is in the government’s response. Commenting on Bush’s lack of engagement, MSNBC’s Chris Matthews said this week, “Where’s the President? He’s pulling one of these Katrinas again.”