I guess the source shouldn’t surprise anyone, as former Treasury Secretary Paul O’Neill has a habit of saying some fairly stupid things. Today’s criticism of the Bush administration bailout plan, from an interview with ABC News, starts off well enough. O’Neill thinks that the White House and Congress have both panicked, and that neither Barack Obama nor John McCain know what they’re talking about. Unfortunately, O’Neill reveals himself as a clueless idiot when he tries to toot his own horn:
O’Neill said we got into this mess because bankers were not making prudent decisions, because they believed that by reselling mortgages to Wall Street they weren’t going to be stuck with the problems.
“We suspended disbelief and said we can take people with no known source income or wealth generation and we can give them a $500,000 mortgage,” he said. “I think there’s a very important thing: When you violate fundamental principles of economics you can get away with it for a while, but eventually it’s going to get you.”
Does O’Neill wish he was still in office?
“I wish I was there two years ago became I think I would have blown the whistle of these unbelievable loan practices and we would never gotten to today,” he said. “That might be wishful thinking. It’s not possible to really know that. But I’m a detail guy and I think I would have been paying enough attention to the details that I would have stopped the music.”
Say what? These lending practices and the sale of securities from these mortgages go back ten years. Paul O’Neill served in office in 2001 and 2002, leaving at the end of the year. In 2003, with John Snow at the helm, the Bush administration first discovered the problem and tried to get Congress to act. Barney Frank and the Democrats insisted that any attempt to tighten credit was just a sign of latent racism, and Congress balked.
If O’Neill is such a “detail guy”, how did he not catch the 1998 Clinton effort to force lenders into making these bad loans and the Fannie Mae/Freddie Mac effort to buy up all the bad paper and resell it to Wall Street? Is he so clueless that he thinks this started in 2006? What exactly did O’Neill do in office?
This is such a bald and ridiculous attempt to cover his own rear that it almost qualifies as comedy. At any event, it’s absolutely possible to know whether O’Neill would have discovered the problem in 2006, because he slept through it in 2001 and 2002.