Fox News host Neal Cavuto appears to think that the United States is enjoying an economic recovery. Perhaps more surprisingly, he's talking up the idea that former President George W. Bush is somehow responsible for it.
Cavuto made his claims after a Wednesday segment seeming to celebrate the Dow Jones Industrial Average's return to 10,000.
"Meanwhile, big banks are spurring this big rally," he said. "... A year ago, remember, they were the ones behind the big meltdown. Which is why former President George W. Bush was saying in South Korea early this morning his big bank bailout was to thank -- is to thank. So, what was once the Bush recession was once the Bush recovery? Is that a stretch?"
This, in spite of a national growing unemployment rate last measured at nearly 10 percent, according to the United States Department of Labor.
Putting a question to his guest, Cavuto alleged that he was a big critic of President Bush and his $700 billion Troubled Asset Relief Program (TARP), but did not realize how close to "the edge" America's economy was. "He took the bold moves and look where we are a year later," he said.
His guest -- Jim LaCamp, a senior vice president with a firm called "Macro Portfolio Advisors" [sic] -- suggested that it "defies logic that you could blame Bush for the banking problems, the banking system, and criticize the bailouts and not give him a little bit of credit right now."
However, William K. Black, a professor of economics and law with the University of Missouri, would likely disagree with LaCamp. He told PBS host Bill Moyers during a televised interview in April that at the epicenter of the financial collapse were a spate of what he called "liars loans," effectively creating a black hole of unfettered, unmeasured risk to which all else was drawn. The "liars loans," thanks to regulators during the Bush years who essentially abandoned their jobs, were packaged with triple-A ratings and repeatedly resold as exotic securities, effectively creating a financial vacuum.
"Now, a triple-A rating is supposed to mean there is zero credit risk. So you take something that not only has significant, it has crushing risk -- that's why it's toxic -- and you create this fiction that it has zero risk. That itself, of course, is a fraudulent exercise," he said. "And again, there was nobody looking, during the Bush years. So finally, only a year ago, we started to have a Congressional investigation of some of these rating agencies, and it's scandalous what came out.
Furthermore, recipients of the TARP funds, which were meant to soothe banks' toxic assets and help the institutions better hide them by removing the red ink from their books, were not publicly disclosed by the U.S. Treasury under Bush appointee Hank Paulson. Today, TARP Inspector General Neil Barofsky still cannot offer recipient data for some of the funds, and recently told the Senate Banking Committee that while some big banks have repaid their loans, the full sum will never be recovered.
And, as noted by Time magazine in a look back at the Bush administration's greatest financial blunders, Bush's tax cuts returned America to "permanent deficits." An additional $2- $3 trillion spent to occupy two foreign nations dug those deficits even deeper. After the attacks of Sept. 11, 2001, he encouraged not sacrifice or greater community, but shopping and "financial irresponsibility," Time added. A further hostile attitude toward economic truth -- as evidenced by the firing of officials who warned of ballooning deficits, or ousting those who predicted the high price of war in Iraq -- "made it impossible for the Administration to react intelligently to real-world economic problems."
Finally, amid the bailouts, "Bush was heavily criticized over his handling of the crisis and for government policies that were seen as lax in regulation and overly favorable to Wall Street in areas such as credit default swaps and other derivatives -- a major trigger of the turmoil," Business Week noted.
"I don't blame [Bush] for the banking problem," Cavuto's guest said on Wednesday. "I don't give him all the credit for the recovery. But you can't blame him for the problem if you don't give him credit for those moves that were made in helping these banks start to recover."
This video is from Fox News, broadcast Oct. 14, 2009.
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