For Bush, 'Free-Market' Conservatism Was Situational

Bush Paulson Bernanke Cox

President Bush in interventionist mode with Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and Securities and Exchange Commission Chair Chris Cox, Sept. 19, 2008.  Susan Walsh/AP Photo hide caption

toggle caption Susan Walsh/AP Photo

A revealing moment in former President George Bush's interview with NBC News' Matt Lauer to promote his new memoir "Decision Points" came during Bush's discussion of the Wall Street bailouts in 2008.

It's then that the ex president tacitly acknowledges that while a lot of politics is waged in the region of rigid ideology, governing, especially during emergencies, happens in a more pragmatic world.

Bush's self-perception and political brand was that of a free-market conservative. But he had to ditch that when he concluded in the frightening days of 2008 that only the federal government was big enough to save the U.S. financial system.

He doesn't say this but he essentially was a free-market conservative when the economy was on the way up, and an interventionist when it was on the way down.

It's a variation of the criticism of Wall Street heard in recent years; financial executives sought to privatize the profits while socializing the losses.

The relevant excerpt from the interview:

LAUER's Lead-In: In the Fall of 2008, George W. Bush's top economic advisers told him that the banking system, and therefore the whole U.S. economy, was about to collapse.

BUSH: I'm paraphrasing at this point, "You better do somethin' big, 'cause if we don't, you're liable to oversee a depression."  So the decision point here is, do you adhere to your philosophy and say, "Let 'em all fail."  You know, they pay—

LAUER: Free market—

BUSH: For yeah, free market.  Or do you take taxpayers' money and inject it into the system in hopes that you prevent a depression?  And I chose the latter.

LAUER: Yeah, you write that, "You know, I abandoned the free market to save the free—"

BUSH: I did.

LAUER: “—market system."

BUSH: I did.  And a lot of people and I also put in there my friends in Midland are gonna say, "What happened to Bush?"

LAUER: Yeah.  Where was that conservative?

BUSH: Yeah, what happened?  But when you're the President and somebody says, "Hey, if you don't do something strong, there may be a depression."  It gets your attention… at least it got mine.

LAUER: You went with the TARP program.

BUSH: We did.

LAUER: A lot of people now call it the bank bailout.  And they hate it.

BUSH: Yeah, they do hate it.  I can understand that.  Look, the idea of spending taxpayers' money to give to Wall Street and the banks to save them… a lot of people think they created the crisis in the first place and so I can understand the angst.  But in my case, I wasn't worried about angst, personal angst or contradiction.  I was worried about the economy goin' down.  And I believe TARP saved the economy.

So ideology is a great thing to have, except sometimes it can get in the way of dealing with the problem at hand, Bush seems to be saying. In times of crises, sometimes you just have to be pragmatic.

Even as Bush admits he selectively became a big-government interventionist in the latter half of 2008 when the wheels were coming off the global financial system, he apparently will only take that thinking so far.

Lauer asked Bush if the financial crisis resulted from a lack of regulatory oversight on the president's watch until the situation got too out of hand. Bush became a free-market conservative again.

LAUER: You said Wall Street got drunk, and yet I'm wondering did you do enough?   During the time of your Presidency did you do enough to take the keys of the car—

BUSH: Yeah.  I also—

LAUER: —Away from Wall Street?

BUSH: Yeah, I say Wall Street got drunk and we got the hangover to complete the sentence.

LAUER: Right.

BUSH: And yeah, I— I frankly don't think this is a crisis of the lack of regulation.

LAUER: If you were President again, though, and TARP came up again, you would do the exact same thing?

BUSH: Absolutely, given the same circumstances.  The other thing about TARP that people forget is that we structured it so that the gov— or the people would be repaid with a really good rate of return.  And as it turns out, that aspect of TARP, that's what happened.

Bush also had a message for all those voters who have blamed President Obama for TARP. They're aiming their ire at the wrong decider.

LAUER: You know what else people seem to forget?  A recent poll said— they asked people who'd, who created TARP?  Fifty percent of the people said Barack Obama.

BUSH: Oh yeah. Fifty percent of the people were wrong 'cause it happened on my watch.



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