Interviewed by John King on CNN's State of the Union this weekend, former vice president
Henry F. Potter Dick Cheney wasn't really able to tell us why Republicans like himself should have any credibility whatsoever when it comes criticizing the Obama economic plan, considering how well theirs worked out.
Here's how theirs worked out:
Here's how Cheney explained it:
Well, there are all kinds of arguments to be made on that point. But there's something that is more important than the specific numbers you're talking about, and that had to be priority for our administration.
Eight months after we arrived, we had 9/11. We had 3,000 Americans killed one morning by al Qaeda terrorists here in the United States. We immediately had to go into the wartime mode. We ended up with two wars in Afghanistan and Iraq. Some of that is still very active. We had major problems with respect to things like Katrina, for example. All of these things required us to spend money that we had not originally planned to spend, or weren't originally part of the budget.
Stuff happens. And the administration has to be able to respond to that, and we did.
... We always said -- I always said that wartime scenario is cause for an exception in terms of spending. It was appropriate in World War II, certainly, and I think it's appropriate now.
So his excuse for the sour economy was 9/11 -- which happened six years before the economy started heading south -- and the Iraq invasion -- which turned out not to have been quite as necessary as advertised.
But earlier in the same interview, Cheney had claimed that it was actually all Democrats' fault:
Well, I don't follow the news quite as closely as I once did. But there's no question that what the economic circumstances that he inherited are difficult ones. You know, we said that before we left. I don't think you can blame the Bush administration for the creation of those circumstances. It's a global financial problem. We had, in fact, tried to deal with the Fannie Mae and Freddie Mac problem some years before with major reforms and were blocked by Democrats on the Hill, Barney Frank and Chris Dodd.
Well, there's no doubt that the Fannie/Freddie debacle was part of the latter stages of the economic debacle. But an honest and thorough look at the causes of the economic meltdown -- such as that offered by Wall Street Watch earlier this week -- has plenty of blame to pass around, and no small portion of it falls on the shoulders of the Bush administration.
The report found 12 key steps that led to the debacle:
Financial deregulation led directly to the current economic meltdown. For the last three decades, government regulators, Congress and the executive branch, on a bipartisan basis, steadily eroded the regulatory system that restrained the financial sector from acting on its own worst tendencies. "Sold Out" details a dozen key steps to financial meltdown, revealing how industry pressure led to these deregulatory moves and their consequences:
1. 1. In 1999, Congress repealed the Glass-Steagall Act, which had prohibited the merger of commercial banking and investment banking.
2. Regulatory rules permitted off-balance sheet accounting -- tricks that enabled banks to hide their liabilities.
3. The Clinton administration blocked the Commodity Futures Trading Commission from regulating financial derivatives -- which became the basis for massive speculation.
4. Congress in 2000 prohibited regulation of financial derivatives when it passed the Commodity Futures Modernization Act.
5. The Securities and Exchange Commission in 2004 adopted a voluntary regulation scheme for investment banks that enabled them to incur much higher levels of debt.
6. Rules adopted by global regulators at the behest of the financial industry would enable commercial banks to determine their own capital reserve requirements, based on their internal "risk-assessment models."
7. Federal regulators refused to block widespread predatory lending practices earlier in this decade, failing to either issue appropriate regulations or even enforce existing ones.
8. Federal bank regulators claimed the power to supersede state consumer protection laws that could have diminished predatory lending and other abusive practices.
9. Federal rules prevent victims of abusive loans from suing firms that bought their loans from the banks that issued the original loan.
10. Fannie Mae and Freddie Mac expanded beyond their traditional scope of business and entered the subprime market, ultimately costing taxpayers hundreds of billions of dollars.
11. The abandonment of antitrust and related regulatory principles enabled the creation of too-big-to-fail megabanks, which engaged in much riskier practices than smaller banks.
12. Beset by conflicts of interest, private credit rating companies incorrectly assessed the quality of mortgage-backed securities; a 2006 law handcuffed the SEC from properly regulating the firms.
It also notes that the behavior was bipartisan: both Republicans and Democrats alike bellied up to the lobbying trough the financial sector created in the decade before the meltdown, and they likewise voted for and approved the policies that followed.
But let's be clear about this: This was in every respect a conservative enterprise. Deregulation is a cornerstone of conservative dogma, and when Democrats have indulged it, it has been their way of establishing their "centrist" or "conservative" bona fides. Liberals have never favored deregulation except as a sop to conservative conventional wisdom.
Cheney may not want the blame. But as one of the major figures in power among conservatives in the period during which these ultimately catastrophic decisions were made, history will assign it to him nonetheless -- and deservedly.