Examining the Bush legacy in 'The Decider'

In the waning days of the Bush presidency, a new type of storm, a financial storm hit America. Hard. Just weeks before, President Bush had predicted good economic weather ahead.

BUSH: "My belief is that the fundamentals of our economy are strong.”

September 17, 2008.  Just days after investment giant Lehman brothers went bankrupt - Americans went on a bank run — it was the day Wall Street stood still.

STEVE FORBES: On that one Wednesday, over $140 billion were drawn.  People were scared, they just wanted out. Clutch the cash, like food in a famine. 

But with this storm, as with Katrina,  President Bush was mostly out of sight. The next day he finally spoke for all of two minutes. 

BUSH: The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence. Thank you.

He took no questions as the worst financial crisis since the Great Depression was looming. The next day, September 19^th, flanked by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, Bush announced an unprecedented  $700 billion plan for the Feds to buy bad debt from banks. 

Video   Economy plagues Bush legacy Dec. 29: In early September 2008, Wall Street took a turn for the worst with Lehman Brothers declaring bankruptcy and Merrill Lynch being bought out. A financial storm hit America just as President Bush predicted good economic weather ahead. Hardball

BUSH: Given the precarious state of today's financial markets government intervention is not only warranted, it is essential.

JOSEPH STIGLITZ, PROFESSOR, COLUMBIA UNIVERSITY: We have never had a government intervening in the market to the extent that the Bush Administration has intervened.  What he himself did were acts of what might be called socialism.

It was a 180 turnabout for a man who confidently took office as a  free market conservative. 

BUSH STATE OF THE UNION 2001: Our new governing vision says government should be active, but limited; engaged, but not overbearing.

GRETCHEN MORGENSON, NEW YORK TIMES: A very crucial decision that was made was "hands off"of Wall Street and, you know, the large institutions and the big banks  way that that kind of laid the groundwork for the financial crisis.

For years Bush's laissez-faire approach seemed to work.   After a 9/11 downturn, the U.S. economy came back strong fueled by Bush's tax cuts and a massive housing boom, one he zealously promoted.

BUSH INAUGURAL SPEECH – JANUARY 20, 2005:To give every American a stake in the promise and future of our country, we will build an ownership society.

But by 2006, some economists were characterizing the housing boom as a housing bubble like the Internet bubble of the 90s but much bigger.

FRUM: It was not like there were a whole lot of other voices in the country saying—"Stop this housing bubble before it inflates.”  People were enjoying it. And Congress was with them.

MORGENSON: You had home owners that were lured into very risky mortgages that they didn't understand that had very punishing aspects to them, interest rates that were going to escalate dramatically, and prepayment penalties that were punishing.

August 2007. Two Bear Stearns investment funds based on sub-prime mortgages went belly up.  Soon home prices tumbled and mortgage holders began to default.  As the crisis grew, Paulson and Bernanke took charge. Bush, the Decider, once again farmed out critical decisions.

FORBES: He's obviously not into economics. Most people aren't. But, when you're in the Oval Office you've gotta make sure you get on top of it.  Abraham Lincoln  knew nothing about war or military. And he learned very quickly. And that's what you've gotta do. And this President did not.

In September 2008 Paulson and Bernanke crafted the $700 billion bailout to try to stop the firestorm that was quickly going global. The president found himself espousing measures before the world that were once anathema to him.

BUSH: Those of you who have followed my career know that I'm a free market person. until you're told that if you don't take decisive action, our country could go into a depression greater than the Great Depression.

Victimized by his own anti-regulation ideology, George W. Bush suffered the final, humiliating blow to his legacy... the one delivered by the American people on election night.

DRAPER: The signs that we have been seeing lately are signs of a man  who's ready to go home to Texas.  And who recognizes that his power has diminished to near nothingness.   And that perhaps, America will be better served with the page turned.

WOODWARD: The financial crisis may be the event that defines his presidency as much as the Iraq war.

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