NYTimes
WASHINGTON — The global financial system was teetering on the edge of collapse when President Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, “scared the hell out of everybody.”
It was Sept. 18. Lehman Brothers had just gone belly-up, overwhelmed by toxic mortgages. Bank of America had swallowed Merrill Lynch in a hastily arranged sale. Two days earlier, Mr. Bush had agreed to pump $85 billion into the failing insurance giant American International Group.
The president listened as Ben S. Bernanke, chairman of the Federal Reserve, laid out the latest terrifying news: The credit markets, gripped by panic, had frozen overnight, and banks were refusing to lend money.
Then his Treasury secretary, Henry M. Paulson Jr., told him that to stave off disaster, he would have to sign off on the biggest government bailout in history.
Mr. Bush, according to several people in the room, paused for a single, stunned moment to take it all in.
“How,” he wondered aloud, “did we get here?”
Eight years after arriving in Washington vowing to spread the dream of homeownership, Mr. Bush is leaving office, as he himself said recently, “faced with the prospect of a global meltdown” with roots in the housing sector he so ardently championed.
There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk.
But the story of how we got here is partly one of Mr. Bush’s own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.
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My comment: Unrestricted, unregulated "free-market" capitalism is a market philosophy that pirates of the Somali coast have adopted. They invest a little capital (in AK-47s and speed boats), take a few risks and net a multi-billion dollar container ship loaded with Nike sneakers headed for the Port of Newark that they can ransom for a couple million.
The idea that an industry can (or will) police itself is absurd. Think study hall in high school when the teacher left the room.
The belief that if we keep giving money to the people who need it least will result in some of it trickling down (particularly in a global economy) is naive.
The thing that differentiates civilization from the jungle is the existence of rules. Any system that has the goal of eliminating the rules also has the goal of eliminating civilization.
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