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White House v. The New York Times … Round 41

The White House has taken on the New York Times for “Egregious Claims In The New York Times Article On The Housing Crisis.”

Read the NYT article here and join us after the jump for the White House’s points…


White House Statement on New York Times Housing Article

THE WHITE HOUSE
First Dana Perino put out this statement:

    STATEMENT BY PRESS SECRETARY DANA PERINO

    Most people can accept that a news story recounting recent events will be reliant on ’20-20 hindsight’. Today’s front-page New York Times story relies on hindsight with blinders on and one eye closed.

    The Times’ ‘reporting’ in this story amounted to finding selected quotes to support a story the reporters fully intended to write from the onset, while disregarding anything that didn’t fit their point of view. To prove the point, when they filed their story, NYT reporters were completely unfamiliar with the President’s prime time address to the nation where he laid out in detail all of the causes of the housing and financial crises. For example, the President highlighted a factor that economists agree on: that the most significant factor leading to the housing crisis was cheap money flowing into the U.S. from rest of the world, so that there was no natural restraint on flush lenders to push loans on Americans in risky ways. This flow of funds into the U.S. was unprecedented. And because it was unprecedented, the conditions it created presented unprecedented questions for policymakers.

    In his address the President also explained in detail the failure of financial institutions to perform normal and necessary due diligence in creating, buying and selling new financial products — a problem that almost no one saw as it was happening.

    That the NYT ignored such an important economic speech to the American people and the complex causes of the crises is gross negligence.

    The Times story frequently repeats a charge by the Administration’s critics: a ‘laissez faire’ attitude toward regulation. We make no apology for understanding the concept of regulatory balance. That is, regulation should be stringent enough to protect the greater public good and safety but not overly strong so that it unnecessarily inhibits innovation, creativity and productivity gains that are the sole source of increasing Americans’ standards of living. But while repeating this charge, the reporters gave glancing attention to the fact that it was this Administration that pushed for strengthened regulation and oversight, greater transparency, and housing reform.

    The story also gives kid glove treatment to Congress. While the Administration was pushing for more transparent lending rules and strengthening oversight and supervision of Fannie and Freddie, Congress for years blocked attempts at stronger regulation and blocked reform of the Federal Housing Administration. Democratic leaders brazenly encouraged Fannie and Freddie to loosen lending standards and instead encouraged the housing GSEs to play a larger and larger role in the housing market — even while explicitly acknowledging the rising risks. And while the story notes the political contributions of some banks to Republicans, it neglects that political contributions from Fannie Mae and Freddie Mac overwhelmingly supported Democratic officials — in particular the chairmen of the banking committees. In fact, even in the midst of what by then was a housing crisis, it took Congress nearly a full year to pass specific legislation called for by the President in the summer of 2007, especially legislation to reform oversight of Fannie Mae and Freddie Mac.

    There are many more reporting failures in this story — failure to consider the impact of monetary policy; ignoring the regional nature of housing markets; and ignoring the Bush Administration’s historic proposal to overhaul the nation’s regulatory system, for example. But then a review of these issues would wave complicated the reporters’ myopic point of view that only Bush Administration policies could possibly be responsible for the housing and finance crises.

…and followed with this:

    Office of the Press Secretary

    __________________________________

    For Immediate Release December 21, 2008

    Setting The Record Straight:

    The Three Most Egregious Claims In The New York Times Article On The Housing Crisis

    The New York Times Reporters Jo Becker, Sheryl Stolberg, And Stephen Labaton Ignore The Facts And Place Unfounded Blame On President Bush And His Administration Over The Current Housing Crisis

    “Most people can accept that a news story recounting recent events will be reliant on ’20-20 hindsight’. Today’s front-page New York Times story relies on hindsight with blinders on and one eye closed. The Times’ ‘reporting’ in this story amounted to finding selected quotes to support a story the reporters fully intended to write from the onset, while disregarding anything that didn’t fit their point of view. To prove the point, when they filed their story, NYT reporters were completely unfamiliar with the President’s prime time address to the Nation where he laid out in detail all of the causes of the housing and financial crises.”

    - White House Press Secretary Dana Perino, 12/21/08

    1. The New York Times wrongly accuses President Bush and his Administration of disregarding signs of danger from Government Sponsored Enterprises (GSEs) and ignores the President’s prime time address to the Nation where he laid out in detail all of the causes of the housing and financial crises, arguing that “as early as 2006, top advisers to Mr. Bush dismissed warnings from people inside and outside the White House that housing prices were inflated and that a foreclosure crisis was looming.” (Jo Becker, Sheryl Gay Stolberg, Stephen Labaton, “White House Philosophy Stoked On Mortgage Bonfire,” New York Times, 12/21/08)

    The New York Times completely ignores the fact that while the Administration was pushing for more transparent lending rules and reining in Fannie Mae and Freddie Mac, Congress had for years blocked attempts at stronger regulation and blocked reform of the Federal Housing Administration.

  • House Financial Services Committee Chairman Barney Frank (D-MA) criticized the President’s warning saying: “these two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis . The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” (Stephen Labaton, “New Agency Proposed To Oversee Freddie Mac And Fannie Mae,” New York Times, 9/11/03)

  • Senate Committee on Banking, Housing and Urban Affairs Chairman Christopher Dodd also ignored the President’s warnings and called on him to “immediately reconsider his ill-advised” position. (Eric Dash, “Fannie Mae’s Offer To Help Ease Credit Squeeze Is Rejected, As Critics Complain Of Opportunism,” New York Times, 8/11/07)

    Over the past six years, the President and his Administration have not only warned of the systemic consequences of failure to reform GSEs but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform at least 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President’s repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems. Many prominent Democrats, including House Finance Chairman Barney Frank, opposed any legislation correcting the risks posed by GSEs.

    2. The New York Times notes the political contributions of some banks to Republicans, saying “in the 2004 election cycle, mortgage bankers and brokers poured nearly $847,000 into Mr. Bush’s re-election campaign, more than triple their contributions in 2000, according to the nonpartisan Center for Responsive Politics.”

    The article neglects to acknowledge that political contributions from Fannie Mae and Freddie Mac overwhelmingly supported Democratic officials – in particular members of Democratic leadership:

    * Since 1989, Senator Chris Dodd (D-CT) has received $165,400 from Fannie Mae and Freddie Mac. (Lindsay Renick Mayer, “Fannie Mae And Freddie Mac Invest In Lawmakers,” Center For Responsive Politics’ “Capital Eye” Blog, www.opensecrets.org , 9/11/08)

    * Since 1989, Senate Majority Leader Harry Reid (D-NV) has received $77,000 from Fannie Mae and Freddie Mac. (Lindsay Renick Mayer, “Fannie Mae And Freddie Mac Invest In Lawmakers,” Center For Responsive Politics’ “Capital Eye” Blog, www.opensecrets.org , 9/11/08)

    * Since 1989, House Speaker Nancy Pelosi has received $56,250 from Fannie Mae and Freddie Mac. (Lindsay Renick Mayer, “Fannie Mae And Freddie Mac Invest In Lawmakers,” Center For Responsive Politics’ “Capital Eye” Blog, www.opensecrets.org , 9/11/08)

    3. The New York Times wrongly accuses the President of encouraging reckless lending in order to expand the Republican base: “For Mr. Bush, it was part of his vision of an “ownership society,” in which Americans would rely less on the government for health care, retirement and shelter. It was also good politics, a way to court black and Hispanic voters.”

    The facts show that, throughout his eight years, the President was actually encouraging careful and wise lending and emphasized the obligations and responsibilities that come with homeownership. “We’ve got to be wise about how we deal with the closing documents and all the regulations, but also wise about how we help people understand what it means to own their home and the obligations and the opportunities.” (President George W. Bush, Remarks On Homeownership, Atlanta, GA, 6/17/02)

    # # #

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