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.

Comments

[pjburke]

"Yes, Democrats like Barney Frank resisted reform."

No.

Democrats -- particularly Barney Frank -- did not 'resist reform.' The notion is simply incorrect.­.. part of the wishful revisionism of the Republican Media Malevolency. Democrats -- particularly Barney Frank --proposed & pushed reform bill after reform bill and were shot down by the Republican majority time after time. Even after Dems retook both houses of Congress, Senate Republicans bottled up the reform bills that Democrats, led by Barney Frank, had passed in the House.

[realpolitic]

Rove has already claimed that Congress rushed the administration into war. Even many Republicans laughed at that claim. Bush has been asleep at the wheel for eight years. The only compliment that Rove can give Bush is that he is a very sound sleeper. Both men have less than a fleeting acquintance with fair play, morality, and the feelings of others.

[mgloraine]

Congressman Frank has already responded to accusations that he was resistant to regulation of subprime lending prior to the financial crisis:

http://www.huffingtonpost.com/rep-barney-frank/wall-street-journal-edito_b_150350.html

So I believe that your statement - "Yes, Democrats like Barney Frank resisted reform." - is unfair to Rep. Frank. There certainly were / are Democrats resistant to prudent regulation, but Barney Frank should not be the name casually tossed off as an example.

[billstewart]

The housing price crash and mortgage problems didn't happen merely because of a lack of regulation. Bush increased the Federal deficit by $5 Trillion, and the Fed kept interest rates artificially low to let him get away with it, which had a lot of impact on housing price growth. And the Bush Republicans changed the bankruptcy laws to favor credit card companies, which significantly increases the risk to mortgage companies - that's a significant problem when the mortgage companies had already securitized those risks.

Besides, the Bush Family has a history of deficit spending and getting mortage companies in trouble (not that GWB personally profited when his brother ruined an S&L through making bad deals..)

[aljstl]

The mortgage industry started turning into a house of cards when home loans became less about long term investment paper and more about up front fees. Mortgage lenders found out that they could create more profits, thus more bonuses, by concentrating on loan fees, not the validity of the loan. Why worry about the long term consequences of writing bad loans to unqualified borrowers with over assessed property when you know that you will immediately package the paper with other bad loans and sell it to someone else. You've made your money with the fees. Who cares if the loan is bad, it's not your problem.

[research]

A shadowy group of rich folks commission a secret new encyclopedia of a completely different world, with different countries, politics, science, everything.

When published, the fictional encyclopedia changes the world to match.

That's Roves favorite story.

[BBackSoon]

When I hear anything that Rove says, I greet it with at least skepticism, but more often with downright disbelief and contempt.

[BrickSykes]

All the 'BushBots' are clambering for forgivenes­s...not from ALL Americans, though. Their 24/7 spinning is directed solely at their 'Base.' The Bushies know that their support base must be constantly soaped up so they won't just throw up their hands and leave the RepugniKon Party! Karl Rove knows this. Funny thing is most of the faithful won't need much to keep them true to the Conservative Cause. They're more fearful of admitting defeat than the Bushies are.

Brick

[Yves Papa]

Karl Rove is NOT a Bush bot. Just try a debate with this guy, you'll see that he knows his stuff. And he has a backbone. And he knows "The Math".

No, he's not a bush bot. It's the other way around.

[BCubedReg]

I'll give you that Rove is shrewd and intelligent, but smart at telling a lie is still a lie.

Rove is only great at lies, misdirection, and obfuscation.

Even a 5-year old knows how to lie.. they are just so innocent you can see right through the lie. Rove is an accomplished liar and has so enrapt himself in his own lies that he has forgotten the truth.

[realpolitic]

Rove knows the "math." Rove thought Republicans were going to win the last two election cycles. Rove's "math" is as fuzzy as everything else about him.

[californiadreamer]

When the dust from the housing bubble collapse settles, it will be clear that it was greed that was the root cause of the catastrophe. Certainly homeowners were greedy about borrowing money to upgrade their homes, but all the professionals doing the lending encouraged them by saying they were "home equity" loans. Problem is now there are fewer and fewer homes with equity. The securitization of these loans by the lenders provided more money to lend and more loans to securitize with huge profits and bonuses to be gained. No one ever sounded the warning bell because that would mean the party was over. Bush was right when he said the Wall Street got drunk, but he was supposed to be in charge of the breathalyzer tests. The designated driver was not at the wheel.

[LeftRight]

I think that I've finally figured out why Greenspan retired when he did. He DID see this coming and decided that he didn't want to be in the crosshairs!