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Does Bush Hold Responsibility For the Housing & Mortgage Crisis?

January 12th, 2009

Jon Kyl and Chris Dodd talking about the mortgage crisis that evolved into a housing crisis.

Blitzer opens with: A lot of people, Senator Kyl in Arizona, in the housing market out there, they’re suffering big-time right now. How much of the blame, and I know you’re a blunt guy, how much of the blame does the Bush administration deserve for allowing this kind of situation to deteriorate, as it has? Does George Bush Have Any Responsibility For this Mortgage Crisis.

KYL: Virtually none.

BLITZER: Why?

KYL: We’ve been predicting for years that this problem would come along. When I was chairman of the Republican Policy Committee, we wrote papers on it. We provide people with the tools to compare mortgage refinance loans and it is not the Federal government’s job to micro-manage banks.

BLITZER: But isn’t the federal government responsible for making sure this kind of situation doesn’t happen?

KYL: The problem is, there is very little regulatory authority. That’s why this legislation that Senator Dodd has been working on, the one good feature of it is additional regulation. But we should have had that regulation four years ago. The other problem, here, is that much of the bailout here is for the people holding bad loans, not the homeowners. It’s for the speculators, the investors. I know in the oil crisis, everybody’s concerned about the speculators driving up the price. What do you think happened in the housing market?

BLITZER: Senator Dodd, go ahead and respond.

DODD: No, no, no. Very specifically, Jon, we absolutely seclude speculators from having any benefit all the under the act. That’s very clear in the law. Of course, this is a highly regulated industry, Jon. This isn’t like hedge funds. The mortgage market has been a highly regulated industry. Where were the cops? Why weren’t they out there saying when brokers were luring people in and saying I’m your financial adviser, a fully indexed price, don’t worry about it, lie about it if you want, we’ll get you into that home.

Those were people that had a responsibility, that failed in that responsibility, and the regulators watching them should have been doing a better job and they didn’t do it. That’s a major reason why we’re seeing the problems we’re seeing today.

KYL: Just one quick example. There’s much to be said. The provision that Chris alluded to that the Bush administration opposes and would veto the legislation over are these CDBG grants. They don’t help. Get the latest News on the Housing Crisis.

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