Bush's Financial Katrina

By Dan Froomkin
Special to washingtonpost.com
Tuesday, March 18, 2008; 12:50 PM

As the storm clouds gathered, was President Bush once again asleep at the wheel?

A consistent theme in today's political and economic coverage is that Bush's failure to recognize the severity of the ongoing financial crisis and act accordingly is reminiscent of his disastrously slow and inept response to Hurricane Katrina.

Maura Reynolds and Janet Hook write in the Los Angeles Times: "In some ways it was a throwaway line, the kind of praise a boss tosses out casually. But as the economy teetered Monday, President Bush's words to Treasury Secretary Henry M. Paulson struck many as discordant and disengaged.

"'I want to thank you, Mr. Secretary, for working over the weekend,' Bush said as he met with his economic advisors at the White House. 'You've shown the country and the world that the United States is on top of the situation.'

"Actually, many analysts and critics said, by focusing on Paulson's working hours instead of on the fear gripping Main Street and Wall Street, the president seemed to show just the opposite -- that he has failed to grasp the gravity of the country's economic crisis.

"'He has no idea what's going on. Even by his standards, he's wrong,' said Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, who said he had been trying to get the president to pay more attention to the economy for more than a year.

"Bush's 'working over the weekend' line also suggested a comparison to another disaster in which he was accused of acting too slowly: Hurricane Katrina. After the storm, the president was ridiculed for praising FEMA Director Michael D. Brown for doing 'a heck of a job' -- even as thousands remained stranded in floodwaters in New Orleans."

What's the equivalent of the broken levees this time around? "[S]ome economists and lawmakers said that the administration had too strongly resisted efforts to regulate either the mortgage industry or Wall Street's new mortgage-backed securities out of a misplaced faith in free markets," Reynolds and Hook write.

"Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee, said he had been trying to get the administration to tighten the rules for mortgage lenders for more than a year -- to little avail.

"'They could have done a lot of things over the last year, in my view, to make a difference and refused to do so,' Dodd said. 'They are lagging in terms of their response to all of this. Had steps been taken over the last year, we could have avoided a lot of this.'"

Matt Spetalnick writes for Reuters: "Not since Hurricane Katrina devastated New Orleans and other parts of the U.S. Gulf Coast in 2005 has Bush faced so much criticism of a too-little, too-late government response in a national time of need."

Spetalnick writes that Bush's "penchant for understatement in the face of what some on Wall Street see as the worst threat to the world financial system since the Great Depression has again underscored questions about his ability to lead through a major crisis.

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