Liberals never take responsibility for their messes

Noam Neusner:

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The Times spends dozens of column inches blaming this financial trauma primarily on President Bush. Except for a pro-forma "to be sure" paragraph early in the piece, no one else comes in for criticism - not the borrowers, not the lenders, not the investors in mortgage-backed products, not the highly paid executives of the federally backed finance agencies, not the developers - and, naturally, not the Democrats, who were warned of the impending danger and could've headed it off.

Sen. Chris Dodd and Rep. Barney Frank appear nowhere in the article - even though these two had the power, by virtue of their leadership of key congressional committees since 2006, to bring reforms to Fannie Mae and Freddie Mac, the two agencies at the heart of the housing-finance bubble.

Even before Democrats took back Congress, Dodd and Frank managed to beat back Bush administration reforms starting in 2002. Dodd and Frank repeatedly declined to consider the president's proposals, which would have probably cut down the housing froth by forcing Fannie and Freddie to stop buying risky mortgage-based investments and subjecting them to full SEC oversight.

In 2003, Frank said the administration was exaggerating the risk. Last summer, Dodd still called these ideas "ill-advised" while Frank called them "inane." The Times chose to mention none of that.

The Times notes that housing-industry leaders gave political donations to Bush. But Fannie and Freddie's biggest giving went to Democrats, including Dodd, House Speaker Nancy Pelosi and President-elect Barack Obama. The Times chose not to mention that.

The Times mentions that Bush gave speeches on the merits of homeownership. But Bush also spoke often of the need for reforms of housing finance: first through his budget proposals starting in 2001, and then via his advisers' testimony to Congress starting in 2002 and then from the stump starting in August 2007 - culminating in this year's State of the Union Address, and 17 other times in 2008 alone before Congress finally decided to act. The Times left that out, too.

What's perhaps most disappointing is that, thanks to its one-sided reporting, the Times missed the opportunity to explain how our government had become, by choice, an active co-investor in America's home real-estate market, carrying a lot of risk and very little opportunity for reward.

The Times could have written about who was responsible - both Republican and Democratic lawmakers. It could have written about how a few voices - including not only President Bush and his top economic advisers, but also Fed chief Alan Greenspan and Clinton Treasury Secretary Larry Summers - had repeatedly warned of the looming danger yet failed to win necessary reforms.

The Times could've done all these things, but chose not to. Beating up on Bush, it appears, is easier.

This was a piece for the history books so that when it is written Democrats will escape blame for their messes and shift responsibility onto President Bush. He is the designated scapegoat for liberals. The White House issued a lengthy response to the Times yesterday, but Neusner summarizes the issues well.

One way to defeat this kind of blame shifting is to hold Democrats like Barney Franks and Chris Dodd responsible. Franks is a smart guy, but he was dead wrong on Freddy and Fannie and he blocked meaningful reform. Dodd is not a smart guy, and he is unethical on top of that. That he is still in a leadership position shows how Democrats protect their incompetents.

The Times response seems to be that it covered the other guys in other stories in the series. Context by reference does not seem to have worked out too well for them on this story.