In praise of what Bush said about Wall Street

President Bush asked attendees at a Republican fundraiser in Houston to turn off their cameras. Someone didn't. A Houston TV station got hold of video. "Wall Street got drunk," Mr. Bush said. "And now it's got a hangover. The question is, how long will it sober up and not try to do all these fancy financial instruments?" A very good analysis. One little-mentioned factor in the subprime mortgage debacle is that financial instruments have indeed grown so complex that even the experts don't understand them well enough to accurately foretell all their effects. Look at the financial giants who've lost tens of billions of dollars in bad debt writedowns and lost investment opportunities: companies Lehman Brothers and Merrill Lynch are supposed to be the smart ones. They owe their very existence to the public perception that they know how to invest better than the rest of us do. But when subprime lending returned fast profits and others dove into the mortgage-backed securities business, they followed. They went on a bender. Now they have the mother of all headaches. The president, who by the way must have known someone would have recorded what he said, is totally right about this one.

Comments

[Tracy Reasoner]

If Wall St. got drunk, George Bush and the GOP were the bartenders. In most states, if a bartender feeds too much alcohol to a customer and it ends in tragedy they can be held liable but not him and his cronies. It will be everyone else who pays for it.