"Flashback: In 2004 Bush Campaigned For Re-Election On The Backs Of Subprime Mortgages"
During the 2004 campaign, President Bush declared his pride in making America what he called “an ownership society.” He promoted expanding home-ownership as the best way to ensure a strong economy, campaigning constantly on the idea:
5/6/04: “Thanks to being the most productive workforce in America, and I might say, thanks to good policies, this economy is strong and it’s getting stronger. … Home sales were the highest ever recently. That’s exciting news for the country.”
8/28/04: See, I love an ownership society. It’s a hopeful society. It’s a society that provides stability in times of change.
8/9/04: If you own your own home, and building equity in your own home, and you’re changing from job to job, it provides great security and relief.
8/6/04: Home ownership is at an all-time high now in America. That’s fantastic news. Isn’t it wonderful to have somebody for the first time be able to say: welcome to my home; I’m glad you’re here at my piece of property.
Watch a 2004 campaign ad in which Bush fawns over the inherent value of ownership:
Of course, what the current enormous crisis — rooted in subprime mortgages — proves is that promoting home ownership without regulatory safeguards is inherently risky. As economist Paul Krugman explained, “[B]orrowing to buy a home is like buying stocks on margin: if the market value of the house falls, the buyer can easily lose his or her entire stake.” And that’s just what happened: More homeowners now owe more money than their homes are actually worth, while foreclosure filings in August rose 12 percent from July — and represented a 27 percent increase from Aug. 2007.
Further, the quest for an all-encompassing ownership society led to the policies that have created the crisis. From dramatically low interest rates to ignoring the warnings about predatory lending to quashing state regulations that would have helped prevent such massive Wall Street investment in subprime loans, Bush and his allies built an economy on a house of cards that was bound to collapse.
Today, Bush declared, “There will be ample opportunity to debate the origins of this problem.” That debate will need to focus on his own failed promise of an “ownership society” as an economic panacea.