After the crisis became clear in early 2007, the Fed chairman, Treasury secretary, president and senior members of Congress repeatedly underestimated its severity.

The claim is that, from early 2007 onwards, four sets of officials repeatedly understated the severity of the crisis: the Fed chairman (Bernanke), the Treasury secretary (Paulson), the president (Bush) and senior members of Congress. The evidence would be dated public statements from 2007 to 2008, such as testimony, speeches and press remarks, describing the problem as contained, limited or manageable when it later proved far worse. TRUE: such statements are documented for all four sets of officials, more than once for each. MOSTLY TRUE: this is documented for three of the four, or the premise that the crisis's 'full extent became clear early in 2007' is overstated but the underestimation pattern holds. MIXED: this is documented for only about two of the four. MOSTLY FALSE: only isolated single statements exist, or the officials mostly warned of serious risk. FALSE: the record shows these officials consistently judged the severity accurately or overstated it.

Set before the research began.

1. E1 The economic outlook Board of Governors of the Federal Reserve System · 28 March 2007

   “At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.”

2. E2 The economic outlook Board of Governors of the Federal Reserve System · 28 March 2007

   “To the downside, the correction in the housing market could turn out to be more severe than we currently expect, perhaps exacerbated by problems in the subprime sector.”

3. E3 LAWFUEL – The Legal Newswire – President George W. Bush on Friday trie… LawFuel · 31 August 2007

   ““The recent disturbances in the subprime mortgage industry are modest, they’re modest in relation to the size of our economy,” he said.”

4. E4 The Problem With Paulson Entrepreneur (reprinted from Portfolio.com) · 12 May 2008

   ““I don’t see it imposing a serious problem. I think it’s going to be largely contained,” he declared.”

I rated this mixed. Bernanke's March 2007 testimony said the effect of subprime problems on the wider economy "seems likely to be contained" (E1). In the same testimony he also warned that the housing correction could be more severe than expected (E2). On 31 August 2007, Bush called the subprime disturbances "modest" relative to the economy (E3), and a 2008 article quotes Paulson saying the problem would be "largely contained" (E4). So the evidence shows understatement by three of the four groups, but only one statement each. Nothing here covers senior members of Congress. The "repeatedly" part of the claim is not shown for any of them, so the evidence only partly supports it.