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Associated Press/Photo by Ron Edmonds

Parting shots

Politics | Outgoing Vice President Dick Cheney sat down in the West Wing Thursday for an extensive interview, reflecting on his eight years in office

AP: So let's start with the economy. Did you ever think that you'd be-that we'd be finishing a two-term Republican presidency with a federal budget deficit so high, with bailouts and government spending sort of run away?
VICE PRESIDENT CHENEY: No, obviously, I wouldn't have predicted that. On the other hand I wouldn't have predicted 9/11, the global war on terror, the need to simultaneous run military operations in Afghanistan and Iraq, or the near collapse of the financial system on a global basis, not just the U.S.

So it's not a-it's a difficult set of problems without question. And I wouldn't have predicted the things that caused it. It's not as though somebody went out and created a huge deficit because they like deficits. You've got the business of having to shore up the financial system, because the financial system is central to the whole, and because the government has a major responsibility for the nation's finances, in terms of the Federal Reserve, the Securities and Exchange Commission, the Treasury, regulatory authority over the financial sector, the value of the dollar and so forth.
AP: People think that the administration didn't see it coming, and they want to know why?
VICE PRESIDENT CHENEY: Well, I don't know that anybody did.
AP: But why, why didn't you see such a huge downfall in the economy coming?
VICE PRESIDENT CHENEY: I suppose because nobody anywhere was smart enough to figure that out. There may have been a few people who figured it out. But when I look back on it, I think a lot of what happened financially had to do with Fannie Mae and Freddie Mac, that those were programs that were put in place by the federal government, produced subprime mortgages and mortgage-backed securities, and were invested in on a global basis.
AP: I mean, I know you asked the Congress for reform on that and they didn't act.
AP: But I mean, we can't really blame the whole debacle on the fact that there was no Fannie Mae and Freddie Mac reform.
VICE PRESIDENT CHENEY: No, but I think you can with the whole concept with mortgage-backed securities that were developed, where the old relationship between borrower and lender broke down, and all of those mortgages were packaged, some good viable instruments, others were questionable in terms of their repayment.

And things happened in the financial community, and I'm not an expert on it, but I think things happened in the financial community that created a situation in which, for example, the five-major investment banks that existed a year ago were gone, or fundamentally transformed themselves. And it's not just a U.S. problem, this isn't something that happened only in Washington and New York, this is in fact, a global problem.
AP: No, but it started here. And I think-
VICE PRESIDENT CHENEY: Did you see it coming? (Laughter.)
AP: I wasn't responsible for seeing it coming.
VICE PRESIDENT CHENEY: Now, what my point is that I don't think anybody saw it coming.
AP: Who was?
AP: Was it the SEC? Or was it a lack of regulation like everybody is claiming? Or down the road will we see something completely different?
VICE PRESIDENT CHENEY: I don't know. I kind of don't want to get into the business of casting aspersions on anybody. I don't think we can be that precise about it. But I do think, in terms of when it happened, that we did respond very aggressively. And that's when we came up with the TARP program and the initial authority for the Secretary of Treasury, and work with the Federal Reserve to basically rescue the financial system and send it back on a proper course. And I think that it's been generally successful. The process isn't complete yet. Obviously, some of it has still got to be worked out.

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Separate and apart from that, but related obviously, is the recession. We had many years of continued economic growth, periodically, we have recessions. I think the financial system contributed to that to some extent, but we find ourselves simultaneously with having had to deal with the financial crisis and a significant recession.
AP: Is there any reason why the administration didn't feel it owes any kind of apology at all to the American people? I mean, there's a lot of people who are-who their 401(k)s are a disaster. People are upside down in their mortgages. I know people who have lost their houses. And they're working people like me. I mean, it's affecting a lot of people-
AP: And now they're saying unemployment could be up to ten percent. I mean, does the-does the President feel any need to apologize on that front, or do you think he needs to?
VICE PRESIDENT CHENEY: No, I don't think he needs to apologize. I think what he needed to do was to take bold, aggressive action, and he has.
AP: OK, one real quick question on oil. You've talked a lot about-the President has talked a lot about weaning ourselves from foreign-dependence on foreign oil. But over the past eight years, we know our dependence has gone up. Is that-why hasn't-why haven't we been able to pull back at all from that?
VICE PRESIDENT CHENEY: We had a pretty good proposal. We put together a task force that I've chaired. In May, I think we published our recommendations, in May of '01. And we had great difficulty getting the Congress to approve it. But it would have expanded our production here in the U.S. It would have encouraged conservation. It would have supported new technologies. We've got bits and pieces of it enacted over the years. But when it got right down to it, Congress wasn't prepared to support tough action. In fact, we decreased our imports.
AP: Do you think the gas prices-gas prices obviously have fallen drastically.
VICE PRESIDENT CHENEY: They have fallen dramatically. They went up-
AP: It doesn't cost me nearly as much to fill my tank. So is that going to reduce the pressure on politicians to change policies?
AP: Are you worried about that?
VICE PRESIDENT CHENEY: There were a lot of headlines when the gasoline price went up. I haven't seen that many headlines as it came down. That's not news.


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