Dan Froomkin Watches as the Press "Katrinas" George W. Bush

Dan writes:

Bush's Financial Katrina: As the storm clouds gathered, was President Bush once again asleep at the wheel? Aconsistent theme in today's political and economic coverage is that Bush's failure to recognize the severity of the ongoing financial crisis and act accordingly is reminiscent of his disastrously slow and inept response to Hurricane Katrina.

Maura Reynolds and Janet Hook write in the Los Angeles Times:

In some ways it was a throwaway line, the kind of praise a boss tosses out casually. But as the economy teetered Monday, President Bush's words to Treasury Secretary Henry M. Paulson struck many as discordant and disengaged. 'I want to thank you, Mr. Secretary, for working over the weekend,' Bush said as he met with his economic advisors at the White House. 'You've shown the country and the world that the United States is on top of the situation.'

Actually, many analysts and critics said, by focusing on Paulson's working hours instead of on the fear gripping Main Street and Wall Street, the president seemed to show just the opposite -- that he has failed to grasp the gravity of the country's economic crisis. 'He has no idea what's going on. Even by his standards, he's wrong,' said Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, who said he had been trying to get the president to pay more attention to the economy for more than a year.

Bush's 'working over the weekend' line also suggested a comparison to another disaster in which he was accused of acting too slowly: Hurricane Katrina. After the storm, the president was ridiculed for praising FEMA Director Michael D. Brown for doing 'a heck of a job' -- even as thousands remained stranded in floodwaters in New Orleans.

It is remarkable: how many weekends in the past twenty years have not seen Hank Paulson at work?

Dan goes on:

Reynolds and Hook write....

Sen. Christopher J. Dodd (D-Conn.), chairman of the Senate Banking Committee, said he had been trying to get the administration to tighten the rules for mortgage lenders for more than a year -- to little avail.

'They could have done a lot of things over the last year, in my view, to make a difference and refused to do so,' Dodd said. 'They are lagging in terms of their response to all of this. Had steps been taken over the last year, we could have avoided a lot of this.'

Matt Spetalnick writes for Reuters:

Not since Hurricane Katrina devastated New Orleans and other parts of the U.S. Gulf Coast in 2005 has Bush faced so much criticism of a too-little, too-late government response in a national time of need....

Frederick Kempe writes in his Bloomberg opinion column:

The cost of faltering American leadership is growing as quickly as you can say Bear Stearns. . . . International financiers . . . fault George W. Bush for having failed to realize that he has another Katrina on his hands, this time of a financial nature, for which private-sector solutions are useful but not sufficient to keep the levees in place. They believe he has to deploy greater government means to send a message to the financial world that he is drawing a line in the sand. . . . As with the war in Afghanistan, the Iraqi war aftermath, the Hurricane Katrina disaster and current efforts at Mideast peace, investors are concerned that the president is responding too late and with inadequate understanding, resources and creativity....

On the Daily Show, Jon Stewart shows a clip in which CNBC anchor Mark Haines literally throws his hands in the air in disbelief after Bush's positive comments about the economy. Stewart listens to Bush's constant repetition of economic affirmations and concludes that "must be his attempt at a Jedi mind-trick." But, Stewart says: "Here's the thing, Mr. President: In order for the Jedi mind-trick to work -- you have to be a Jedi"...

Comments

[Thomas]

This is remarkably bad stuff. The story about Katrina, we've been told by folks like Froomkin, is that Bush and the administration weren't focused, and that the administration didn't have the right people in place. Here, it's clear that the administration is focused, and that Paulson and Bernanke are exactly the sort of people that everyone wants in place. Froomkin suggests that the administration should be doing something different, more. (Does he care to make a suggestion?) So where's the comparison to (Froomkin's version of) Katrina?

As for Bush's comments: Paulson's weekend began at a 5 am Friday meeting, apparently continued late into the night Friday night, began early Saturday with frantic calls to his home, lasted well into the night Saturday, and continued into Sunday evening. Paulson spent the weekend in discussions with Bear Stearns and JP Morgan and their advisers, with management at other banks, with Bernanke and others from the Fed, and with key Democrats in Congress, all in an attempt to get an unprecedented deal done, avoid additional disruption in the market, and satisfy important Democratic lawmakers. It likely was a stressful and physically draining experience. If I worked for someone who didn't acknowledge that kind of effort, I'd be disappointed.

[christofay]

Paulson signed up for financial meltdown when he signed on. The current financial troubles were already baked into the year-end bonsues, so Thomas I am glad you are weeping for the hard work Pauson is doing as I will not. When you are minister of economics for a 1st world country, it is expected without mention that there will be bouts of long workdays. It just happened to be news to Bush who is rarely troubled beyond his 6 hour workday, 4-1/2 day workweek and 3 months of vaca a year. Paulson is fighting hard to continue the gravy train that he came from.

Now Thomas can you address the $30 bil doughnut the Fed had to give Moregain in order that that Moregain too didn't go down the drain this week in their low-ball offer in buying Bear?

Perhaps you can go theoretical, is the difference between Bear's closing market value on Friday afternoon and opening market value on Monday morning the value of the Greenspan Put? Once it is used, it's value goes poof.

[christofay]

Volcker speaks sense. Why no posts about Volcker, inflation slayer, creator of Greenspan's rep, enabler of steady low risk growth?

[christofay]

"The story about Katrina, we've been told by folks like Froomkin, is that Bush and the administration weren't focused, and that the administration didn't have the right people in place."

Actually that is the case, the administration isn't focused, and our country doesn't have the right people in place.

To extend the Katrina metaphor, 2006 would be the year the hurricane entered the gulf, 2007 was the year the financial storm was within 10 miles of the city then hit it. 2006 Bush and his enablers were propagating the line that Bush wasn't getting credit for the strong economy. 2007 was the year that Paulson and Bernanke spent repeating the inane phrase the problem is contained.

Now the city is flattened and the suburbs are getting hit so Paulson is swinging into action seeing how his friends 3rd or 4th weekend home is being destroyed.

It's hard work giving deca billions to the already received too much.

[Roger Bigod]

If a commercial airline flight runs out of fuel in midair, we expect the crew to effect an emergency landing. If they go into a pout because it's not supposed to happen, that isn't so good. But they're supposed to check the fuel gauges before takeoff, and afterwards to revise procedure so it doesn't happen again. Here, there's no before and no after. They ignored warnings about fraudulent mortgages and toxic derivatives for years, and they aren't going to do anything to clean up the systemic problem. Wouldn't be free market, y'know.

We have to settle for entertainment. It's like one of the Blond Celebrity Disaster sagas. Britney or Paris had to hit the pedestrian because she was fleeing from the abusive boyfriend who thought she gave him herpes. She found a wonderful tantric color therapist, except she can't pay the fees because the trust fund went up her nose. But it's all understandable if you can see how everything is interrelated.

I'm sure the parents/enablers of those women have interesting lives. But I don't want people who think like that in charge of the banking system.

[bakho]

This administration is anti-regulation. If they were not going to add important new regulation to the mortgage lenders, what else could they have done? The best monetary policy in the world is inadequate if the sharks and con-men operate at will. Bush has locked the regulatory tools in the shed and thrown away the key. That door will not be opened until the 2009 when the next administration arrives.

New Orleans still has not been fixed after Katrina. Look for 10 more months of financial soap opera.

[jerry]

"Here, it's clear that the administration is focused, and that Paulson and Bernanke are exactly the sort of people that everyone wants in place."

The animals are out, but I wish to announce that the barn door is firmly closed. Hank has been operating that barn door for close on to 20 years. No one knows better than Hank HOW to close that barn door.

No one could have anticipated terrorists flying planes into buildings!

No one told me there was going to be math required.

[Neal]

This administation has always had the problem of believing that they know everything, and that those things that run contrary to their beliefs are wrong and impossible.

This is yet again another time when their beliefs have been proven wrong with disasterous consequences for the US.

It's not that there was no way to see the potential problems, it's that they believed that they were infallible--by definition, never wrong.

Therefore there is no need for fall-back positions, alternate plans, competent planners, competent administrators, retreat routes, evacuation plans, safety nets, or "red teams".

Dissent, even gentle questioning of assumtions, is traitorous in this system, because you are questioning the infallible.

Oddly enough, in a twisted way, it is the perfect administration for a time in America when religion and politics are conflated to the degree that they are.

Surely this must be the most arrogant American administration, ever!!!

[James Wimberley]

Is it really a good idea to encourage George Bush to work over the weekend? The last time this happened was before he invaded Iraq.

[Thomas]

I see that a certain sort of troll is out and about, and apparently welcome here.

I would note that our host was more supportive of the appointments of Messrs. Bernanke and Paulson than some here are.

[ThresherK]

christofay: It just happened to be news to Bush who is rarely troubled beyond his 6 hour workday, 4-1/2 day workweek

I'm rarely troubled by Bush's workweek now.

How many more hours a week with the nose to the grindstone before GWB becomes a good president? We've seen what he's capable of. More will not be better.

[Roger Bigod]

"If they were not going to add important new regulation to the mortgage lenders, what else could they have done?"

When the authorities prohibit vaccination, they look marvelously heroic fighting the ensuing smallpox epidemic.

[jerry]

"I would note that our host was more supportive of the appointments of Messrs. Bernanke and Paulson than some here are."

Our host has tenure, so we have to correct for his inherent, systemic, biases that often demonstrate themselves as poor judgment.

It's not clear what your excuse is, but I am curious as to the nature of the troll you have apparently witnessed. Did it carry mining tools? It may have been a dwarf.

[kharris]

Thomas,

Sometimes, troll is in the eye of the beholder. The response to your comment, for instance, suggests that other commenters thought you were trolling.

Other than his resume, which I admit is one way to judge qualifications, what is it that makes you think Paulson is the sort of person we should want heading Treasury? He has been in place a while now. What policy has he undertaken that was not already a Bush priority that you find admirable in its conception, and that has been carried through in good order, or is being carried through in a way that suggests good order?

One thing I note is that he showed up wanting to relieve the reporting and regulatory burden for US corporations. In the specific case of mortgage lenders, I believe he has modified that position. Dodd and Frank suggest he is ready to modify his opposition to their HFA bill. I'd guess that in the case of investment banks, he going to change his view. It may transpire that he has been wrong in each case. Are there cases you can point to where Paulson has been right in the face of opposition, and won the day?

[christofay]

No reply from Thomas, he must have gone back to his appointed position in the Federal government.

[jerry]

I think you're right christofay. I enjoyed this: "I would note that our host was more supportive of the appointments of Messrs. Bernanke and Paulson than some here are", because it is rude to disagree with our host and for some reason our host can set a lower bound of our happiness with these appointments.