Bush says 'my conscience is clear' about financial crisis [Updated]
Former President George W. Bush on Wednesday accepted some blame for the financial crisis that took place during his last months in office but declared he has a clear conscience that a lack of regulation by his administration did not cause it.
"Well, I don't think this was a matter of over-regulation or lack of regulation. It was a matter of poor judgment by Wall Street and others," Bush said as he continued to plug his new memoir on NBC's "Today" show. "But no question, the housing bubble was fueled by government policy, and that is the result of people and Congress refusing to regulate Fannie [Mae] and Freddie [Mac].
"So my conscience is clear when it came time to recognize an impending problem," he said.
[Updated at 8:45 a.m.: Bush discusses the financial crisis starting at about 3:08 in the video clip above.]
Bush said his administration shared the blame for the crisis with "a lot of people." But he wrote in his book, "Decision Points," that his administration recognized "a looming problem" with the housing finance giants Fannie and Freddie, and their involvement in risky sub-prime mortgages. His push for tougher regulation "was thwarted every turn by powerful forces on Capitol Hill."
On the brink of failure, Fannie and Freddie were seized by the government in September 2008. Republicans and Democrats have hotly contested who was to blame for the sub-prime meltdown and a combined bailout of about $148 billion that could more than double over the next three years if the economy falls back into recession.
Republicans controlled Congress for the first six years of the Bush administration. But some Democrats were strong supporters of Fannie and Freddie, which had powerful lobbying operations, and they helped thwart legislation aimed at tightening regulation. Reform legislation passed in 2008 after Democrats took control of Congress, but it was too late to save the housing market or the firms.
Bush defended the $700-billion Troubled Asset Relief Program, the controversial bailout fund known as TARP, which he pushed for to try to halt the financial crisis triggered by the real estate crash. He signed TARP into law and his administration distributed most of the money.
"The lesson there is that I had to set aside an ideology, which was if you make a bad mistake, you pay for it in the marketplace," Bush said of his decision to start the bank bailouts. "The hardest thing for me was not whether or not blame was assigned. The hardest thing for me was to explain to hard-working Americans why we were using ... their money to prop up those who they were blaming for the crisis."
-- Jim Puzzanghera