Can Obama Blame Bush?

We've all heard President Obama say time and again that he "inherited" from President Bush "the worst economic crisis since the Great Depression" and that it takes more than four years or eight years to "clean up the mess." Blaming Bush has been part of the wiring of the Obama team since they began campaigning for the presidency in 2007. In 2008, Obama called Bush "unpatriotic" for adding $4 trillion to the national debt in eight years. He called it "irresponsible" to saddle the nation's children and grandchildren with debt paid for "by a credit card from the national bank of China."

Sometimes Obama officials tell the truth when they blame Bush; other times they tell filthy lies when blaming Bush for their own poor choices. The filthiest lie was when Press Secretary Jay Carney stated at a White House press conference (when asked about the calamitous $500 billion-dollar loan made to the now bankrupt Solyndra) that "the process leading to" the Solyndra loan "began under President Bush." The message is that the Obama administration is not responsible for another Bush blunder.

The reality is that the Bush administration rejected Solyndra's loan-guarantee request! It was rejected because the administration's budget office told the president Solyndra's financial state was so precarious that the company would be bankrupt in a year's time. President Obama received the same advice from the budget office, but made the loan-guarantee to Solyndra anyway. A loan-guarantee means that the taxpayers are co-signing for the loan. In this case, the taxpayers were co-signed to a $500 billion-dollar loan to a company that couldn't pass the credit check!

Aside from this most flagrantly dishonest example of Bush-blaming, can we still swallow Obama's claim that cleaning-up Bush's mess has been such a huge task that he needs a second term to finish it. Let's examine this claim in a little detail.

The Bush years were not so long ago. It seemed like a rough ride at the time. On 9/11/2001, the Twin Towers and the Pentagon were attacked by terrorists. Three thousand Americans were dead. The same evening, the president of the United States gave a radio address announcing that this country was now in a state of war. I was twenty years old. War was something my generation did not grow up with. The Gulf War of 1991 had only lasted a few weeks and Vietnam had long been in school history textbooks. When I was growing up, politics was bland, uninteresting. It seemed far away. Times had been good.

Then, George W. Bush (43rd president of the United States 2001-2009) led the nation into scary waters. Suddenly, our country was fighting a world-wide war against terrorism. Troops by the tens of thousands were sent to Afghanistan and Iraq to defend our freedom and to bring our enemies to justice. War is costly, not just in lives and property, but in finance as well. Republican presidents do not like to raise taxes to pay for increased expenditures. President Bush was no exception. To finance the wars, he borrowed the money instead of charging the American taxpayer. Within a year and a half of the attacks on 9/11, the United States was running record deficits. By the end of the decade, the national debt was $4 trillion dollars higher than it had been previously. This state of affairs could not go on forever. If it did, an eventual run on the dollar would wreck the American economy and make the American dream a thing of the past.

As it turned out, the economy was wrecked by the end of the Bush presidency, but it was not triggered by the national debt. Another monster had been growing alongside the debt and had received much less attention than the national debt and deficits. This monster was a housing bubble, fed by the availability of sub-prime mortgages. To make a long story short, for many years, there had been a collusion between the government and the banks to make mortgage requirements low for lower-income people. Soon, all manner of investment fed off the flourishing mortgage market. Risky mortgage securities were sold, bought, and re-sold again. The entire cycle depended on the ability of the homeowners to pay on the mortgages.

In the summer of 2007, the job market stalled and a wave of foreclosures swept the nation. A year later, the wave arrived at the doors of the major lending houses. Lehman Brothers went under and suddenly the government enacted the Emergency Economic Stabilization Act of 2008 which enabled the U.S. Treasury to spend $700 billion dollars to buy up the risky assets held by the nation's lenders. This influx of cash would save the financial system from collapse. In the coming months, this bailout would be followed-up by additional bailouts of the auto industry. The assumption behind the approach was to save the entire economy by preventing the fall of public and private institutions deemed "too big to fail."

For us to tackle the essential question of whether Obama can blame Bush, we must first ask ourselves what Bush did, what Obama has done, and if their respective approaches to problem-solving were similar or different. President Bush and Senator/President-Elect/President Obama were both at the center of the decision-making behind the bailouts. From September 2008 until January 2009, they worked together and were of the same mind. Bush told Obama the plan he and Treasury Secretary Paulson wanted. Obama agreed and promised to deliver the needed votes from Senate Democrats.

After January 2009, President Obama followed-up the bank bailouts with auto bailouts. Then, his first stimulus bill gave the states an $800 billion-dollar bailout. Soon more, massive infusions of cash into the economy were piped-in.

Four years later, where are we? We are stuck with with high unemployment, a $16 trillion-dollar national debt, and a downgraded credit rating for the United States. (As of 2011, America has lost its AAA credit rating for the first time in history).

Who is to blame? (A) Wall Street Fat-Cats? (B) Republicans? (C) Democrats? (D) Bush? (E) Obama? (F) Poor people who get in-over-their-heads with a mortgage they can't pay? (G) Fannie and Freddie (gov't sponsored enterprises)? (H) The Federal Reserve?

Everyone shares a part of the blame, but I blame B, C, D, E, F, and H, much more than A and G. Yet, Wall Street and Fannie/Freddie have had more fingers pointed at them than everyone else has had. This is unfair. Can we imagine ourselves turning down a perfectly good opportunity to legally make a ton of cash from trading mortgage-backed securities, or from any other commodity? Why have so many fingers been pointed at Fannie/Freddie when they just take orders from the government when it comes to setting lending rules? Congress, the President (Clinton and Bush), and the Federal Reserve (Greenspan) pressured Fannie/Freddie and banks throughout the system into making easy mortgage loans.

Bush is partly to blame for the mushrooming debt and the bloated, risky sub-prime mortgage market that tanked the economy in 2008.  But who is Obama to be blaming his own failure to fix the problem on Bush when he worked in tandem with him in growing the debt and by responding to the same crisis with the same measures? Since Obama has taken office as the 44th president, he has added $5 trillion [more than Bush added] to the national debt and the consequence has been a downgraded credit rating for the country. According to his own stated principles, Obama is "unpatriotic" for being "irresponsible" in saddling the nation's children and grandchildren with debt paid for "by a credit card from the national bank of China."

The eventual run on the dollar everyone feared in the Bush years has become an even greater likelihood under Obama! Obama can not turn us away from a headlong sprint toward a cliff by taping-down the gas pedal and keeping us headed in the same direction! There is not a chance he will make us better-off in another four years.

Jason A.