George W. Bush has no regrets about his decision to initiate the $700-billion bailout of Wall Street.
In a special hour-long interview Sunday evening with Candy Crowley on "State of the Union," the former president defended his reaction to the financial crisis in 2008:
GEORGE W. BUSH: I wasn't a very good economic prognosticator. I did know
we were in deep trouble. And that's why I made the decision I made. And
in my book, I chronicle the history of the meltdown and then the
decisions I took to prevent the economy from cratering.
There is a lot of people who said, well, the economy, we wouldn't have
seen a depression. The problem is, when you're the president, you don't
have the luxury of being -- talking about the theoretical.
I was advised by people who I trust. I trusted Hank Paulson and Ben
Bernanke that we had better do something. And so I did set aside my free
market principles and made a very difficult decision.
CROWLEY: But never regretted it.
GEORGE W. BUSH: No, I don't. I really don't.
Bush told Crowley that regulation and oversight could not have prevented the great recession without also hindering economic growth:
GEORGE W. BUSH: Yes. No, I think there's a lot of people watching. And I
remember Bear Stearns fails in the spring of 2008, and we acted. But the
interconnectedness of the situation and the money flowing into the
country as a result of trade deficits, and foreign investors looking for
greater returns, and the housing -- the assumption that the housing
prices were going to go up, all led to this, you know, house of cards.
And when it started to collapse, it really started to collapse. And
obviously if there was some way to have stopped it, I would have liked
to have done so. But it was -- I hope it's a once-in-a-lifetime
situation, but they said the Great Depression was a once-in-a-lifetime
situation as well.
The problem is, you've got to be very careful, Candy, not to
over-regulate, because if you try to over-regulate, then investment's
not going to flow. And if investment doesn't flow, then people aren't
going to be able to find work.
CROWLEY: Except I would think, wow, if somebody had set some standards
for loans, these banks would not have been stuck with so much bad paper.
GEORGE W. BUSH: Well, yes, that's right. There were sloppy lending
practices, no question about it. And I wish they would have paid a price.
CROWLEY: But isn't that regulation?
GEORGE W. BUSH: Well, the regulations are on the books about sloppy
lending prices. And, yes -- the danger is, is that -- I mean, the logic
of your questioning is, OK, now in order to prevent a future collapse
from happening, we must over-regulate, or regulate a lot. And the danger --
CROWLEY: Or regulate more.
GEORGE W. BUSH: Well, I mean, it depends on what you're talking about.
The problem is regulation tends to stifle capital investment. And
capital investment is what's necessary to grow the economy. So you've
got to find the right balance.
President Bush's continued support for TARP is at odds with most newly-elected members of Congress who campaigned against the bailout and succeeded in reclaiming the House majority.
A recent poll found that most Americans blame Wall Steet and former President Bush for the economic crisis--not President Obama.
However, those same voters who blame Wall Street, were more likely to vote for Republicans than Democrats--a surprise, considering the Republican parties efforts to neuter legislation that would regulate Wall Street.WATCH: A clip of Crowley's interview with Bush