Wednesday, March 19, 2008

Another mess for Bush

Just as President George W. Bush watered down enforcement of industrial pollution and ignored laws on wiretapping, he helped engineer the mortgage crisis that threatens homeownership for millions of Americans and places major financial institutions in peril.

How? Bush simply called off regulators from doing their job, and blocked all the states from investigating and prosecuting predatory lending practices that are at the heart of the calamity.

This was a reward for his Wall Street cronies, who enjoyed a furious market in sub-prime mortgages, and instant fortunes for some that tapped in early on buying and selling. And sure, the willingness of homebuyers to assume mortgages they couldn't handle is part of the debacle.

But the real villains are big lenders and the indifferent government watchdogs.

New York's just-resigned Gov. Eliot Spitzer recalls that when he was the state's attorney general, he joined attorneys general in the other states to end predatory lending--but were blocked when the Office of the Comptroller of the Currency invoked an obscure 1863 National Bank Act provision preempting state enforcement. The OCC and other regulators then literally ignored the financial outrages unleashed by Wall Street.

The belated Bush cure is to throw more billions of dollars the government doesn't have (and must borrow) at the mortgage crisis, even as Vice President Dick Cheney and GOP presidential nominee John McCain are in Iraq promising a U.S. presence for "years to come" at a cost of more billions Washington must borrow.

The lesson for ordinary Americans? Beware a government that gets into bed with big business.

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