How much of the current economic storm is President Bush's fault?
Policy analysts on the left and the right say he and his administration bear some significant responsibility but hardly the bulk of it.
Mortgage-industry innovations and changes in the regulatory environment were under way before Mr. Bush took office. Congress and some of his White House predecessors – notably Bill Clinton – shared Bush's desire to expand home-ownership. And the Federal Reserve, a body independent of the president, played a key role in setting monetary conditions and supervising the banking industry. The list could go on.
In this context, the Bush administration's failure may be one of omission rather than commission – the failure of regulators to decide that they need to act to slow the flood of loose credit. Also, as investment banks created more and more complicated financial products, regulators fell behind in simply keeping tabs on it all.
Once the crisis began, Bush and Henry Paulson, his Treasury secretary, were slow to come to grips with its magnitude, experts say. Yet the same could be said of many economists.
When large banks began tottering last year, Bush, with Mr. Paulson acting as crisis manager, tried to contain the economic fallout – even though the effort involved historic government interventions in the marketplace.
Bush's prime-time speech on Sept. 24, in which he somberly told Americans that a $700 billion financial rescue fund was needed to prevent millions of job losses, was perhaps the defining economic moment of his presidency.
As Bush's term in office ends, however, he and his successor are tethered. Many policies Bush and Paulson put in place will remain for Obama to manage and modify. Obama's own efforts to revive the economy will affect how deep the ongoing recession becomes – which in turn will color Bush's reputation as well as Obama's own.
But it's clear the crisis has led to some outcomes Bush hadn't planned on:
•A president who championed businesses interests, after witnessing some years of record corporate profits, leaves office with the very survival of some large firms at stake.
•A salesman for the "ownership society," who presided over record levels of homeownership, leaves office with the homeownership rate headed in reverse, due to mounting foreclosures. Family net worth is falling along with home values.
•Bush's legacy appears certain to trigger a tightening of financial regulations, after a period in which even a Democratic president declared "the era of big government ... over." As the recession deepens, government's role in the economy is expected to ramp up in many other ways, including what will possibly be a record stimulus measure early this year.
•A great tax cutter leaves record budget deficits, making it hard for future presidents to keep taxes so low.