Karl Rove's Latest Fictions

Karl Rove is at it again. Fresh from having presented President Bush as one of the nation's most ardent bookworms last week, he defends him today in the Wall Street Journal from the charge of having bungled the economy. "President Bush tried to rein Fan and Fred," Rove declares. It's the Democrats, he says, who created the mess and are engaging in myth-making by portraying Bush as the bad guy.

In seeking to debunk myths about Bush, however, Rove creates his own. Yes, Democrats like Barney Frank resisted reform. But it's also the case that Bush pushed for home ownership and refused to compromise with Congress on legislative reform. In addition, Bush's own prep school friend, whom he appointed as regulator, declared that Fannie Mae and Freddie Mac were financially sound.

When reflecting upon the Bush legacy, one name from the past eight years comes most acutely to mind: Harvey Pitt. Recall that Bush appointed Pitt in 2001 to head the Securities and Exchange Commission (SEC). Pitt had formerly represented Ivan Boesky as well as the biggest accounting firms. His credo upon entering office was to make the SEC a "kind and gentler place" towards accountants. Pitt flamed out and Bush had to replace him. But Pitt is emblematic of Bush's hands-off approach toward regulating the financial industry. Like Alan Greenspan -- the most overrated chairman in the history of the Federal Reserve -- he believed the childish fiction that corporations, banks, and investment firms could somehow magically regulate themselves. The result has been economic catastrophe.

Now Republicans such as Rove are going into overdrive to salvage what they can of Bush reputation. Expect more historical revisionism in coming weeks about Bush's sagacity and shrewd decisions. By next week, Rove will probably claim that the Democrats, not Bush, were responsible for the failure to prepare for the Iraq War.