Bush admits he was "blindsided" by financial crisis

Nov 9, 2010, 17:32 GMT

Washington - Former president George W Bush admitted his administration could not see coming a massive financial crisis that would plunge the world into recession, describing his furore at Wall Street in a new book published Tuesday.

The combination of new complex financial products, credit rating agencies that created 'a false sense of security,' as well as excessive risks and questionable accounting by Wall Street banks had all set the US financial sector up for failure in late 2008.

'For all these reasons, we were blindsided by a financial crisis that had been more than a decade in the making,' Bush wrote in his memoir Decision Points.

The massive financial crisis would plunge the US economy into its worst recession since World War II and further tarnish the record of a president whose approval ratings had plummeted in the last years of his presidency with the US mired in a war in Iraq.

Bush defended his handling of the financial shock, writing that his administration's measures helped avert a crisis as serious as the Great Depression of the 1930s.

Bush said the government's massive intervention to rescue Wall Street, including a 700-billion-dollar bail-out package that was opposed by most of his own Republican Party, 'flew against all my instincts' as a supporter of free markets.

'I was furious the situation had reached this point,' Bush wrote, blaming the crisis on a failure of government oversight and 'a relatively small group of people' in Wall Street and other sectors.

'But it was necessary to pull the country out of the panic,' he wrote.

Yet Bush also expressed frustration at those in his own party who he said failed to understand the magnitude of the crisis and the need for the government to go 'all in' to save Wall Street and the broader economy.

'I felt like the captain of a sinking ship,' he wrote, describing the darkest days of the financial crisis in the aftermath of the Lehman Brothers bankruptcy in September 2008.

The Republican lawmakers' rejection of the bail-out package in a first vote on September 29, 2008, prompted the worst one-day point loss in the history of the Dow Jones Industrial Average.

'I knew the vote would be a disaster,' Bush wrote. The bail-out package was approved in a second vote three days later.

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