In recent interviews, President Bush and Vice President Dick Cheney have expressed divergent views, especially on foreign policy.

Mr. Bush defends his decisions as necessary to keep the nation safe, yet sounds reflective, even chastened. He has expressed regrets about not achieving an overhaul of immigration laws and not changing the partisan tone in Washington. And the man who got tangled up in a question about whether he had made any mistakes — he could not come up with one in 2004 — recently told ABC News that he was “unprepared for war,” and that “the biggest regret of all the presidency has to have been the intelligence failure in Iraq.”

Mr. Cheney, by contrast, is unbowed, defiant to the end. He called the Supreme Court “wrong” for overturning Bush policies on detainees at Guantánamo Bay; criticized his successor, Vice President-elect Joseph R. Biden Jr.; and defended the harsh interrogation technique called waterboarding, considered by many legal authorities to be torture.

“I feel very good about what we did,” the vice president told The Washington Times, adding, “If I was faced with those circumstances again, I’d do exactly the same thing.”

The difference in tone, friends and advisers say, reflects a split over Mr. Bush’s second-term foreign policy, which Mr. Cheney resisted as too dovish. It also reveals their divergent approaches to post-White House life. Mr. Bush, who is planning a public policy center in Dallas, is trying to shape his legacy by offering historians a glimpse of his thinking, while Mr. Cheney, primarily concerned about the terrorist threat, is setting the stage for a role as a standard-bearer for conservatives on national security.

“The president’s interviews are about creating a basis for historians to evaluate the context of his decisions differently, with more input from him,” said Wayne Berman, who has advised Mr. Bush and is a longtime friend of Mr. Cheney. “Cheney is living in the moment of, ‘There’s a serious ongoing threat,’ and I believe he sees himself more in a Churchill-like role, as the sentinel issuing the call for vigilance.”

Mr. Bush and Mr. Cheney still have lunch together once a week, administration officials say, and the vice president remains the president’s staunchest defender. But while Mr. Cheney has been ”loyal to a fault,” said John R. Bolton, the former ambassador to the United Nations whose views often reflect those of the vice president, he is also “increasingly in a beleaguered position.”

In the first term, Mr. Cheney, backed by his close ally, Donald H. Rumsfeld, who was then the defense secretary, was ascendant, and his views about the aggressive use of executive authority and military might held great sway. But after Mr. Bush fired Mr. Rumsfeld in 2006 — the only presidential decision Mr. Cheney has publicly disagreed with — the vice president took a back seat to Secretary of State Condoleezza Rice, who pushed the president to pursue greater diplomacy with two countries he once called “rogue nations,” Iran and North Korea.

“Our ability to explain what we’ve been doing in the national security field for eight years has been wholly inadequate,” Mr. Bolton said, “and part of that is because too many high officials in the administration were embarrassed by the decisions. Cheney has never been embarrassed by it, and now, in the last months, he is freer to make the kind of forceful and emphatic case for it that others were unwilling to make.”

Mr. Bush and Mr. Cheney appear to be giving more interviews than their recent predecessors. Dan Quayle, the last vice president not to seek the presidency while in office, gave three exit interviews; Mr. Cheney has so far given four. President Ronald Reagan gave five interviews during his last two months in office; President Bill Clinton gave seven. Mr. Bush has already given 10, to outlets as varied as Real Clear Politics, the Pentagon Channel, an Arabic television channel and a sportswriter for The Washington Post; the White House says more are to come.

Historians say presidents, especially those who serve two terms, often grow reflective at the end of their tenure. “They tend to be exhausted, they’re worn out, they’re trying to make some sense of their administrations, and there’s a natural tendency for them to want to give their own perspective,” said Jay Winik, who got to know Mr. Bush and Mr. Cheney after they read his book, “April 1865,” an account of the last month of the Civil War.

Never the introspective type, Mr. Bush has been freely answering “how do you feel” queries, which he once routinely dismissed as “goo-goo questions,” said his first press secretary, Ari Fleischer. He has also used his interviews to reveal his softer side. He has spoken of “my relationship with the Good Lord,” joked about his wife’s cooking and spotlighted social programs he regards as achievements, like education reform and his global plan to fight AIDS.

If he has criticisms of President-elect Barack Obama, Mr. Bush has not shared them; rather, he has hewed to the Bush family credo of graciousness in departure or defeat. (“I think he’s discovered his inner Bush,” Mr. Berman, the adviser, said.) He also opened the door to a possible role for himself in the Obama presidency, citing his own decision to ask his father, the first President Bush, and Mr. Clinton to spearhead a fund-raising effort for tsunami victims.

“President-elect Obama, I am confident, will call upon presidents to take on a mission,” Mr. Bush told C-Span. “I will be happy to do it, particularly if I agree with the mission.”

Mr. Cheney has been less diplomatic. Like Mr. Bush, he has praised Mr. Obama for keeping Robert M. Gates as defense secretary. But on “Fox News Sunday” this week, Mr. Cheney shot back at Mr. Biden for calling him “the most dangerous vice president in history.” And asked by The Washington Times for his advice for Mr. Obama, Mr. Cheney talked of the importance of personnel decisions, then volunteered, “Senator Clinton as secretary of state — I would never pick her to be my secretary of state.”

Both men say they look forward to private life. For Mr. Cheney, who has served in four Republican administrations, transitions are nothing new. “It’s not my first time at the rodeo,” he told The Washington Times.

Mr. Bush, who became Texas governor 14 years ago, told ABC News that he was eager to “live life without the limelight.” Yet both will have more to say. Mr. Cheney is likely to write a book. Mr. Bush is contemplating a farewell address, and says he will definitely write a book, to give Americans, as he told The Washington Times, “one man’s point of view that happened to be in the center of it all.”

THE BLUEPRINTS In June 2002, President Bush spoke in Atlanta to unveil a plan to increase minority homeownership.

WASHINGTON — The global financial system was teetering on the edge of collapse when President Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, “scared the hell out of everybody.”

It was Sept. 18. Lehman Brothers had just gone belly-up, overwhelmed by toxic mortgages. Bank of America had swallowed Merrill Lynch in a hastily arranged sale. Two days earlier, Mr. Bush had agreed to pump $85 billion into the failing insurance giant American International Group.

The president listened as Ben S. Bernanke, chairman of the Federal Reserve, laid out the latest terrifying news: The credit markets, gripped by panic, had frozen overnight, and banks were refusing to lend money.

Then his Treasury secretary, Henry M. Paulson Jr., told him that to stave off disaster, he would have to sign off on the biggest government bailout in history.

Mr. Bush, according to several people in the room, paused for a single, stunned moment to take it all in.

“How,” he wondered aloud, “did we get here?”

Eight years after arriving in Washington vowing to spread the dream of homeownership, Mr. Bush is leaving office, as he himself said recently, “faced with the prospect of a global meltdown” with roots in the housing sector he so ardently championed.

There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk.

But the story of how we got here is partly one of Mr. Bush’s own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.

From his earliest days in office, Mr. Bush paired his belief that Americans do best when they own their own home with his conviction that markets do best when let alone.

He pushed hard to expand homeownership, especially among minorities, an initiative that dovetailed with his ambition to expand the Republican tent — and with the business interests of some of his biggest donors. But his housing policies and hands-off approach to regulation encouraged lax lending standards.

Mr. Bush did foresee the danger posed by Fannie Mae and Freddie Mac, the government-sponsored mortgage finance giants. The president spent years pushing a recalcitrant Congress to toughen regulation of the companies, but was unwilling to compromise when his former Treasury secretary wanted to cut a deal. And the regulator Mr. Bush chose to oversee them — an old prep school buddy — pronounced the companies sound even as they headed toward insolvency.

As early as 2006, top advisers to Mr. Bush dismissed warnings from people inside and outside the White House that housing prices were inflated and that a foreclosure crisis was looming. And when the economy deteriorated, Mr. Bush and his team misdiagnosed the reasons and scope of the downturn; as recently as February, for example, Mr. Bush was still calling it a “rough patch.”

The result was a series of piecemeal policy prescriptions that lagged behind the escalating crisis.

“There is no question we did not recognize the severity of the problems,” said Al Hubbard, Mr. Bush’s former chief economics adviser, who left the White House in December 2007. “Had we, we would have attacked them.”

Looking back, Keith B. Hennessey, Mr. Bush’s current chief economics adviser, says he and his colleagues did the best they could “with the information we had at the time.” But Mr. Hennessey did say he regretted that the administration did not pay more heed to the dangers of easy lending practices. And both Mr. Paulson and his predecessor, John W. Snow, say the housing push went too far.

“The Bush administration took a lot of pride that homeownership had reached historic highs,” Mr. Snow said in an interview. “But what we forgot in the process was that it has to be done in the context of people being able to afford their house. We now realize there was a high cost.”

For much of the Bush presidency, the White House was preoccupied by terrorism and war; on the economic front, its pressing concerns were cutting taxes and privatizing Social Security. The housing market was a bright spot: ever-rising home values kept the economy humming, as owners drew down on their equity to buy consumer goods and pack their children off to college.

Lawrence B. Lindsay, Mr. Bush’s first chief economics adviser, said there was little impetus to raise alarms about the proliferation of easy credit that was helping Mr. Bush meet housing goals.

“No one wanted to stop that bubble,” Mr. Lindsay said. “It would have conflicted with the president’s own policies.” Today, millions of Americans are facing foreclosure, homeownership rates are virtually no higher than when Mr. Bush took office, Fannie and Freddie are in a government conservatorship, and the bailout cost to taxpayers could run in the trillions.

As the economy has shed jobs — 533,000 last month alone — and his party has been punished by irate voters, the weakened president has granted his Treasury secretary extraordinary leeway in managing the crisis.

Never once, Mr. Paulson said in a recent interview, has Mr. Bush overruled him. “I’ve got a boss,” he explained, who “understands that when you’re dealing with something as unprecedented and fast-moving as this we need to have a different operating style.”

Mr. Paulson and other senior advisers to Mr. Bush say the administration has responded well to the turmoil, demonstrating flexibility under difficult circumstances. “There is not any playbook,” Mr. Paulson said.

The president declined to be interviewed for this article. But in recent weeks Mr. Bush has shared his views of how the nation came to the brink of economic disaster. He cites corporate greed and market excesses fueled by a flood of foreign cash — “Wall Street got drunk,” he has said — and the policies of past administrations. He blames Congress for failing to reform Fannie and Freddie. Last week, Fox News asked Mr. Bush if he was worried about being the Herbert Hoover of the 21st century.

“No,” Mr. Bush replied. “I will be known as somebody who saw a problem and put the chips on the table to prevent the economy from collapsing.”

But in private moments, aides say, the president is looking inward. During a recent ride aboard Marine One, the presidential helicopter, Mr. Bush sounded a reflective note.

“We absolutely wanted to increase homeownership,” Tony Fratto, his deputy press secretary, recalled him saying. “But we never wanted lenders to make bad decisions.”

A Policy Gone Awry

Darrin West could not believe it. The president of the United States was standing in his living room.

It was June 17, 2002, a day Mr. West recalls as “the highlight of my life.” Mr. Bush, in Atlanta to unveil a plan to increase the number of minority homeowners by 5.5 million, was touring Park Place South, a development of starter homes in a neighborhood once marked by blight and crime.

Mr. West had patrolled there as a police officer, and now he was the proud owner of a $130,000 town house, bought with an adjustable-rate mortgage and a $20,000 government loan as his down payment — just the sort of creative public-private financing Mr. Bush was promoting.

“Part of economic security,” Mr. Bush declared that day, “is owning your own home.”

A lot has changed since then. Mr. West, beset by personal problems, left Atlanta. Unable to sell his home for what he owed, he said, he gave it back to the bank last year. Like other communities across America, Park Place South has been hit with a foreclosure crisis affecting at least 10 percent of its 232 homes, according to Masharn Wilson, a developer who led Mr. Bush’s tour.

“I just don’t think what he envisioned was actually carried out,” she said.

Park Place South is, in microcosm, the story of a well-intentioned policy gone awry. Advocating homeownership is hardly novel; the Clinton administration did it, too. For Mr. Bush, it was part of his vision of an “ownership society,” in which Americans would rely less on the government for health care, retirement and shelter. It was also good politics, a way to court black and Hispanic voters.

But for much of Mr. Bush’s tenure, government statistics show, incomes for most families remained relatively stagnant while housing prices skyrocketed. That put homeownership increasingly out of reach for first-time buyers like Mr. West.

So Mr. Bush had to, in his words, “use the mighty muscle of the federal government” to meet his goal. He proposed affordable housing tax incentives. He insisted that Fannie Mae and Freddie Mac meet ambitious new goals for low-income lending.

Concerned that down payments were a barrier, Mr. Bush persuaded Congress to spend up to $200 million a year to help first-time buyers with down payments and closing costs.  And he pushed to allow first-time buyers to qualify for federally insured mortgages with no money down. Republican Congressional leaders and some housing advocates balked, arguing that homeowners with no stake in their investments would be more prone to walk away, as Mr. West did. Many economic experts, including some in the White House, now share that view.

The president also leaned on mortgage brokers and lenders to devise their own innovations. “Corporate America,” he said, “has a responsibility to work to make America a compassionate place.”

And corporate America, eyeing a lucrative market, delivered in ways Mr. Bush might not have expected, with a proliferation of too-good-to-be-true teaser rates and interest-only loans that were sold to investors in a loosely regulated environment.

“This administration made decisions that allowed the free market to operate as a barroom brawl instead of a prize fight,” said L. William Seidman, who advised Republican presidents and led the savings and loan bailout in the 1990s. “To make the market work well, you have to have a lot of rules.”

But Mr. Bush populated the financial system’s alphabet soup of oversight agencies with people who, like him, wanted fewer rules, not more.

Like Minds on Laissez-Faire

The president’s first chairman of the Securities and Exchange Commission promised a “kinder, gentler” agency. The second was pushed out amid industry complaints that he was too aggressive. Under its current leader, the agency failed to police the catastrophic decisions that toppled the investment bank Bear Stearns and contributed to the current crisis, according to a recent inspector general’s report.

As for Mr. Bush’s banking regulators, they once brandished a chain saw over a 9,000-page pile of regulations as they promised to ease burdens on the industry. When states tried to use consumer protection laws to crack down on predatory lending, the comptroller of the currency blocked the effort, asserting that states had no authority over national banks.

The administration won that fight at the Supreme Court. But Roy Cooper, North Carolina’s attorney general, said, “They took 50 sheriffs off the beat at a time when lending was becoming the Wild West.”

The president did push rules aimed at forcing lenders to more clearly explain loan terms. But the White House shelved them in 2004, after industry-friendly members of Congress threatened to block confirmation of his new housing secretary.

In the 2004 election cycle, mortgage bankers and brokers poured nearly $847,000 into Mr. Bush’s re-election campaign, more than triple their contributions in 2000, according to the nonpartisan Center for Responsive Politics. The administration did not finalize the new rules until last month.

Among the Republican Party’s top 10 donors in 2004 was Roland Arnall. He founded Ameriquest, then the nation’s largest lender in the subprime market, which focuses on less creditworthy borrowers. In July 2005, the company agreed to set aside $325 million to settle allegations in 30 states that it had preyed on borrowers with hidden fees and ballooning payments. It was an early signal that deceptive lending practices, which would later set off a wave of foreclosures, were widespread.

Andrew H. Card Jr., Mr. Bush’s former chief of staff, said White House aides discussed Ameriquest’s troubles, though not what they might portend for the economy. Mr. Bush had just nominated Mr. Arnall as his ambassador to the Netherlands, and the White House was primarily concerned with making sure he would be confirmed.

“Maybe I was asleep at the switch,” Mr. Card said in an interview.

Brian Montgomery, the Federal Housing Administration commissioner, understood the significance. His agency insures home loans, traditionally for the same low-income minority borrowers Mr. Bush wanted to help. When he arrived in June 2005, he was shocked to find those customers had been lured away by the “fool’s gold” of subprime loans. The Ameriquest settlement, he said, reinforced his concern that the industry was exploiting borrowers.

In December 2005, Mr. Montgomery drafted a memo and brought it to the White House. “I don’t think this is what the president had in mind here,” he recalled telling Ryan Streeter, then the president’s chief housing policy analyst.

It was an opportunity to address the risky subprime lending practices head on. But that was never seriously discussed. More senior aides, like Karl Rove, Mr. Bush’s chief political strategist, were wary of overly regulating an industry that, Mr. Rove said in an interview, provided “a valuable service to people who could not otherwise get credit.” While he had some concerns about the industry’s practices, he said, “it did provide an opportunity for people, a lot of whom are still in their houses today.” The White House pursued a narrower plan offered by Mr. Montgomery that would have allowed the F.H.A. to loosen standards so it could lure back subprime borrowers by insuring similar, but safer, loans. It passed the House but died in the Senate, where Republican senators feared that the agency would merely be mimicking the private sector’s risky practices — a view Mr. Rove said he shared.

Looking back at the episode, Mr. Montgomery broke down in tears. While he acknowledged that the bill did not get to the root of the problem, he said he would “go to my grave believing” that at least some homeowners might have been spared foreclosure.

Today, administration officials say it is fair to ask whether Mr. Bush’s ownership push backfired. Mr. Paulson said the administration, like others before it, “over-incented housing.” Mr. Hennessey put it this way: “I would not say too much emphasis on expanding homeownership. I would say not enough early focus on easy lending practices.”

‘We Told You So’

Armando Falcon Jr. was preparing to take on a couple of giants.

A soft-spoken Texan, Mr. Falcon ran the Office of Federal Housing Enterprise Oversight, a tiny government agency that oversaw Fannie Mae and Freddie Mac, two pillars of the American housing industry. In February 2003, he was finishing a blockbuster report that warned the pillars could crumble.

Created by Congress, Fannie and Freddie — called G.S.E.’s, for government-sponsored entities — bought trillions of dollars’ worth of mortgages to hold or sell to investors as guaranteed securities. The companies were also Washington powerhouses, stuffing lawmakers’ campaign coffers and hiring bare-knuckled lobbyists.

Mr. Falcon’s report outlined a worst-case situation in which Fannie and Freddie could default on debt, setting off “contagious illiquidity in the market” — in other words, a financial meltdown. He also raised red flags about the companies’ soaring use of derivatives, the complex financial instruments that economic experts now blame for spreading the housing collapse.

Today, the White House cites that report — and its subsequent effort to better regulate Fannie and Freddie — as evidence that it foresaw the crisis and tried to avert it. Bush officials recently wrote up a talking points memo headlined “G.S.E.’s — We Told You So.”

But the back story is more complicated. To begin with, on the day Mr. Falcon issued his report, the White House tried to fire him.

At the time, Fannie and Freddie were allies in the president’s quest to drive up homeownership rates; Franklin D. Raines, then Fannie’s chief executive, has fond memories of visiting Mr. Bush in the Oval Office and flying aboard Air Force One to a housing event. “They loved us,” he said.

So when Mr. Falcon refused to deep-six his report, Mr. Raines took his complaints to top Treasury officials and the White House. “I’m going to do what I need to do to defend my company and my position,” Mr. Raines told Mr. Falcon.

Days later, as Mr. Falcon was in New York preparing to deliver a speech about his findings, his cellphone rang. It was the White House personnel office, he said, telling him he was about to be unemployed.

His warnings were buried in the next day’s news coverage, trumped by the White House announcement that Mr. Bush would replace Mr. Falcon, a Democrat appointed by Bill Clinton, with Mark C. Brickell, a leader in the derivatives industry that Mr. Falcon’s report had flagged.

It was not until 2003, when Freddie became embroiled in an accounting scandal, that the White House took on the companies in earnest. Mr. Bush decided to quit the long-standing practice of rewarding supporters with high-paying appointments to the companies’ boards — “political plums,” in Mr. Rove’s words. He also withdrew Mr. Brickell’s nomination and threw his support behind Mr. Falcon, beginning an intense effort to give his little regulatory agency more power.

Mr. Falcon lacked explicit authority to limit the size of the companies’ mammoth investment portfolios, or tell them how much capital they needed to guard against losses. White House officials wanted that to change. They also wanted the power to put the companies into receivership, hoping that would end what Mr. Card, the former chief of staff, called “the myth of government backing,” which gave the companies a competitive edge because investors assumed the government would not let them fail.

By the spring of 2005 a deal with Congress seemed within reach, Mr. Snow, the former Treasury secretary, said in an interview. Michael G. Oxley, an Ohio Republican and then-chairman of the House Financial Services Committee, had produced what Mr. Snow viewed as “a pretty darned good bill,” a watered-down version of what the president sought. But at the urging of Mr. Card and the White House economics team, the president decided to hold out for a tougher bill in the Senate.

Mr. Card said he feared that Mr. Snow was “more interested in the deal than the result.” When the bill passed the House, the president issued a statement opposing it, effectively killing any chance of compromise. Mr. Oxley was furious.

“The problem with those guys at the White House, they had all the answers and they didn’t think they had to listen to anyone, including the Treasury secretary,” Mr. Oxley said in a recent interview. “They were driving the ideological train. He was in the caboose, and they were in the engine room.”

Mr. Card and Mr. Hennessey said they had no regrets. They are convinced, Mr. Hennessey said, that the Oxley bill would have produced “the worst of all possible outcomes,” the illusion of reform without the substance.

Still, some former White House and Treasury officials continue to debate whether Mr. Bush’s all-or-nothing approach scuttled a measure that, while imperfect, might have given an aggressive regulator enough power to keep the companies from failing.

Mr. Snow, for one, calls Mr. Oxley “a hero,” adding, “He saw the need to move. It didn’t get done. And it’s too bad, because I think if it had, I think we could well have avoided a big contributor to the current crisis.”

Unheeded Warnings

Jason Thomas had a nagging feeling.

The New Century Financial Corporation, a huge subprime lender whose mortgages were bundled into securities sold around the world, was headed for bankruptcy in March 2007. Mr. Thomas, an economic analyst for President Bush, was responsible for determining whether it was a hint of things to come.

At 29, Mr. Thomas had followed a fast-track career path that took him from a Buffalo meatpacking plant, where he worked as a statistician, to the White House. He was seen as a whiz kid, “a brilliant guy,” his former boss, Mr. Hubbard, says.

As Mr. Thomas began digging into New Century’s failure that spring, he became fixated on a particular statistic, the rent-to-own ratio.

Typically, as home prices increase, rental costs rise proportionally. But Mr. Thomas sent charts to top White House and Treasury officials showing that the monthly cost of owning far outpaced the cost to rent. To Mr. Thomas, it was a sign that housing prices were wildly inflated and bound to plunge, a condition that could set off a foreclosure crisis as conventional and subprime borrowers with little equity found they owed more than their houses were worth.

It was not the Bush team’s first warning. The previous year, Mr. Lindsay, the former chief economics adviser, returned to the White House to tell his old colleagues that housing prices were headed for a crash. But housing values are hard to evaluate, and Mr. Lindsay had a reputation as a market pessimist, said Mr. Hubbard, adding, “I thought, ‘He’s always a bear.’ ”

In retrospect, Mr. Hubbard said, Mr. Lindsay was “absolutely right,” and Mr. Thomas’s charts “should have been a signal.”

Instead, the prevailing view at the White House was that the problems in the housing market were limited to subprime borrowers unable to make their payments as their adjustable mortgages reset to higher rates. That belief was shared by Mr. Bush’s new Treasury secretary, Mr. Paulson.

Mr. Paulson, a former chairman of the Wall Street firm Goldman Sachs, had been given unusual power; he had accepted the job only after the president guaranteed him that Treasury, not the White House, would have the dominant role in shaping economic policy. That shift merely continued an imbalance of power that stifled robust policy debate, several former Bush aides say. Throughout the spring of 2007, Mr. Paulson declared that “the housing market is at or near the bottom,” with the problem “largely contained.” That position underscored nearly every action the Bush administration took in the ensuing months as it offered one limited response after another.

By that August, the problems had spread beyond New Century. Credit was tightening, amid questions about how heavily banks were invested in securities linked to mortgages. Still, Mr. Bush predicted that the turmoil would resolve itself with a “soft landing.”

The plan Mr. Bush announced on Aug. 31 reflected that belief. Called “F.H.A. Secure,” it aimed to help about 80,000 homeowners refinance their loans. Mr. Montgomery, the housing commissioner, said that he knew the modest program was not enough — the White House later expanded the agency’s rescue role — and that he would be “flying the plane and fixing it at the same time.”

That fall, Representative Rahm Emanuel, a leading Democrat, former investment banker and now the incoming chief of staff to President-elect Barack Obama, warned the White House it was not doing enough. He said he told Joshua B. Bolten, Mr. Bush’s chief of staff, and Mr. Paulson in a series of phone calls that the credit crisis would get “deep and serious” and that the only answer was big, internationally coordinated government intervention.

“You got to strangle this thing and suffocate it,” he recalled saying.

Instead, Mr. Bush developed Hope Now, a voluntary public-private partnership to help struggling homeowners refinance loans. And he worked with Congress to pass a stimulus package that sent taxpayers $150 billion in tax rebates.

In a speech to the Economic Club of New York in March 2008, he cautioned against Washington’s temptation “to say that anything short of a massive government intervention in the housing market amounts to inaction,” adding that government action could make it harder for the markets to recover.

Dominoes Start to Fall

Within days, Bear Sterns collapsed, prompting the Federal Reserve to engineer a hasty sale. Some economic experts, including Timothy F. Geithner, the president of the New York Federal Reserve Bank (and Mr. Obama’s choice for Treasury secretary) feared that Fannie Mae and Freddie Mac could be the next to fall.

Mr. Bush was still leaning on Congress to revamp the tiny agency that oversaw the two companies, and had acceded to Mr. Paulson’s request for the negotiating room that he had denied Mr. Snow. Still, there was no deal.

Over the previous two years, the White House had effectively set the agency adrift. Mr. Falcon left in 2005 and was replaced by a temporary director, who was in turn replaced by James B. Lockhart, a friend of Mr. Bush from their days at Andover, and a former deputy commissioner of the Social Security Administration who had once run a software company.

On Mr. Lockhart’s watch, both Freddie and Fannie had plunged into the riskiest part of the market, gobbling up more than $400 billion in subprime and other alternative mortgages. With the companies on precarious footing, Mr. Geithner had been advocating that the administration seize them or take other steps to reassure the market that the government would back their debt, according to two people with direct knowledge of his views.

In an Oval Office meeting on March 17, however, Mr. Paulson barely mentioned the idea, according to several people present. He wanted to use the troubled companies to unlock the frozen credit market by allowing Fannie and Freddie to buy more mortgage-backed securities from overburdened banks. To that end, Mr. Lockhart’s office planned to lift restraints on the companies’ huge portfolios — a decision derided by former White House and Treasury officials who had worked so hard to limit them.

But Mr. Paulson told Mr. Bush the companies would shore themselves up later by raising more capital.

“Can they?” Mr. Bush asked.

“We’re hoping so,” the Treasury secretary replied.

That turned out to be incorrect, and did not surprise Mr. Thomas, the Bush economic adviser. Throughout that spring and summer, he warned the White House and Treasury that, in the stark words of one e-mail message, “Freddie Mac is in trouble.” And Mr. Lockhart, he charged, was allowing the company to cover up its insolvency with dubious accounting maneuvers.

But Mr. Lockhart continued to offer reassurances. In a July appearance on CNBC, he declared that the companies were well managed and “worsts were not coming to worst.” An infuriated Mr. Thomas sent a fresh round of e-mail messages accusing Mr. Lockhart of “pimping for the stock prices of the undercapitalized firms he regulates.”

Mr. Lockhart defended himself, insisting in an interview that he was aware of the companies’ vulnerabilities, but did not want to rattle markets.

“A regulator,” he said, “does not air dirty laundry in public.”

Soon afterward, the companies’ stocks lost half their value in a single day, prompting Congress to quickly give Mr. Paulson the power to spend $200 billion to prop them up and to finally pass Mr. Bush’s long-sought reform bill, but it was too late. In September, the government seized control of Freddie Mac and Fannie Mae.

In an interview, Mr. Paulson said the administration had no justification to take over the companies any sooner. But Mr. Falcon disagreed: “They absolutely could have if they had thought there was a real danger.”

By Sept. 18, when Mr. Bush and his team had their fateful meeting in the Roosevelt Room after the failure of Lehman Brothers and the emergency rescue of A.I.G., Mr. Paulson was warning of an economic calamity greater than the Great Depression. Suddenly, historic government intervention seemed the only option. When Mr. Paulson spelled out what would become a $700 billion plan to rescue the nation’s banking system, the president did not hesitate.

“Is that enough?” Mr. Bush asked.

“It’s a lot,” the Treasury secretary recalled replying. “It will make a difference.” And in any event, he told Mr. Bush, “I don’t think we can get more.”

As the meeting wrapped up, a handful of aides retreated to the White House Situation Room to call Vice President Dick Cheney in Florida, where he was attending a fund-raiser. Mr. Cheney had long played a leading role in economic policy, though housing was not a primary interest, and like Mr. Bush he had a deep aversion to government intervention in the market. Nonetheless, he backed the bailout, convinced that too many Americans would suffer if Washington did nothing.

Mr. Bush typically darts out of such meetings quickly. But this time, he lingered, patting people on the back and trying to soothe his downcast staff. “During times of adversity, he bucks everybody up,” Mr. Paulson said.

It was not the end of the failures or government interventions; the administration has since stepped in to rescue Citigroup and, just last week, the Detroit automakers. With 31 days left in office, Mr. Bush says he will leave it to historians to analyze “what went right and what went wrong,” as he put it in a speech last week to the American Enterprise Institute.

Mr. Bush said he was too focused on the present to do much looking back.

“It turns out,” he said, “this isn’t one of the presidencies where you ride off into the sunset, you know, kind of waving goodbye.”

The president’s plan gives carmakers until March 31 to restructure.

WASHINGTON — The emergency bailout of General Motors and Chrysler announced by President Bush on Friday gives the companies a few months to get their businesses in order, but hands off to President-elect Barack Obama the difficult political decision of ruling on their progress.

The plan pumps $13.4 billion by mid-January into the companies from the fund that Congress authorized to rescue the financial industry. But the two companies have until March 31 to produce a plan for long-term profitability, including concessions from unions, creditors, suppliers and dealers.

Another $4 billion will be available for G.M. if and when the rest of the $700 billion bailout package is released in February.

Even before the March 31 deadline, it might fall to the Obama administration to persuade Congress to release the second $350 billion of the Treasury Department’s huge financial system stabilization program — a request that the Bush administration is reluctant to make because it will face angry criticism by lawmakers.

The auto bailout plan sets “targets” rather than concrete requirements about what those concessions may be, meaning that Mr. Obama and his advisers have enormous latitude to decide how to define long-term viability.

While Mr. Obama has broadly insisted that the automakers radically increase the fuel efficiency of their fleets, reduce carbon emissions and save the maximum number of jobs possible, he will have just nine weeks after taking office to press for a detailed transformation of an industry whose problems have been building for three decades.

In Chicago, Mr. Obama embraced the plan but said he had not had enough time to study the details. He never addressed the question of how he would turn a program designed as a short-term bridge loan into a long-term reorganization.

“I do want to emphasize to the Big Three automakers and their executives that the American people’s patience is running out, and that they should seize on this opportunity over the next several weeks and months to come up with a plan that is sustainable. And that means that they’re going to have to make some hard choices,” he said.

Mr. Obama said it was his intention to preserve jobs “for years to come” and that he wanted to make sure “that it’s not just workers who are bearing the brunt of that restructure, that they’re not the ones who are taking all the hits.”

Yet as the economy falters and joblessness balloons, Mr. Obama will be under extreme political pressure not to be too tough on the industry.

Already, Ron Gettelfinger, the president of the United Automobile Workers union, said he was pleased that the administration acted on the loan requests, but said the president added “unfair conditions” that singled out blue-collar workers.

Mr. Gettelfinger said the union expected to appeal to Mr. Obama to alter the expectations for wage and benefit cuts. According to Treasury Department officials who drafted the wording, Mr. Obama would be free to change the requirements and loosen the standards, especially on how much workers would have to give up.

Mr. Bush announced the plan early Friday, before the markets opened, and took no questions about its details. The day before, he conceded that he had been forced by the severity of the economic downturn to ignore many of the free-market principles he came to office embracing.

G.M. said it expected to draw on the first installment of its loans by Dec. 29. Soon after it pays suppliers and workers, the troubled automaker will begin putting drastic downsizing plans into effect, outlined to Congress this month, which include eliminating more than 30,000 jobs, shutting factories, shedding dealerships and determining the future of its Saab, Saturn and Pontiac brands.

In Detroit, a visibly relieved Rick Wagoner, G.M.’s chairman, told reporters that the loans would allow the automakers to pay their bills and prevent a financial crisis from spreading through the industry’s suppliers and dealers.

Mr. Wagoner, who has been G.M.’s chief executive for eight years, added that he had no plans to step aside during the difficult months ahead. “Do you think I would have gone through what I’ve gone through in the past two months if I didn’t want to stay?”

His reaction was echoed at Chrysler. “We intend to be accountable for this loan, including meeting the specific requirements set forth by the government, and will continue to implement our plan for long-term viability,” Chrysler’s chairman, Robert L. Nardelli, said in an e-mail message to employees.

Beyond the initial hurdles to provide all of the money, it will be left to Mr. Obama to make the tough judgments needed about the future of the industry. Are enough jobs being cut and factories being closed? Have the right product lines been consolidated? Are all of the stakeholders on the same page enough to make the long-term viability plans workable? And how should financial viability be defined?

On paper, Mr. Obama will inherit a club to wield against the automakers and the unions: he can threaten to “call” the loans and require repayment in 30 days.  Yet as a practical matter, demanding immediate repayment would be enormously difficult to do, unless Mr. Obama chose to drive the two icons of American industrial strength into bankruptcy court during the first 70 days of his administration.

His aides know that he will come under tremendous pressure, including from the U.A.W., which supported his candidacy and helped finance his campaign. “What we’ve seen from the U.A.W. already forces Obama to make a decision over whether to throw the U.A.W. under the bus,” said Brian Johnson, an analyst with Barclays Capital.

The bailout Mr. Bush announced is missing one major element: a “car czar” to administer the program, a key feature of the legislation that was defeated in the Senate last week. Until the end of Mr. Bush’s presidency, in just over a month, the Treasury secretary, Henry M. Paulson Jr., will play that role. But it is unclear what will happen after Mr. Obama is sworn in.

For now, his auto brain trust is mainly composed of Paul A. Volcker, the former Federal Reserve chairman, who was on the board for the Chrysler bailout in 1979; Austan Goolsbee, whose expertise at the University of Chicago has been the economics of industrial organizations; and Joshua Steiner, who is experienced in financial restructuring.

While many elements of the loan requirements are drawn from legislation that failed in Congress, there is one crucial difference between Mr. Bush’s plan and the one the House approved: it strips away a requirement that Cerberus Capital Management, the private equity firm that owns 80 percent of Chrysler, be held liable for any losses experienced by the taxpayers.

Instead, Cerberus on Friday said it would give the first $2 billion to the government if it ever sold Chrysler Financial, the company’s financing arm. While it has not asked for immediate help, the Ford Motor Company said it welcomed the assistance to G.M. and Chrysler because of the fragile, interdependent nature of the industry and its vast network of suppliers.

Both G.M. and Chrysler outlined a turnaround program calling for deep cuts in operations and expenses in their original requests to Congress for government loans.

But the White House appears to be expecting more than conventional restructuring strategies. Mr. Bush called for the companies to extract major concessions from their bondholders, creditors, dealers, suppliers and the U.A.W.

Under the Bush administration plan, G.M. and Chrysler would each have immediate access to $4 billion upon the signing of the emergency loan agreements with the Treasury. G.M. would then have access to an addition $5.4 billion on Jan. 16 and another $4 billion on Feb. 17 provided that Congress has released the remaining $350 billion for the Treasury’s rescue program.

The companies would be required to limit executive pay, eliminate “golden parachute” severance packages and sell their corporate jets. While the loans are outstanding, the companies would be barred from paying shareholder dividends.

The loan deal also requires the companies to quickly reduce their huge debt obligations by two-thirds, mostly through debt-for-equity swaps, and to reach agreements on wage and benefit cuts with the unions by Dec. 31.

President Bush, left, ducks a thrown shoe as Iraqi Prime Minister Nuri al-Maliki tries to protect him Sunday.

BAGHDAD — Arriving here on Sunday for a surprise farewell visit, President Bush staunchly defended a war that has taken far more time, money and lives than anticipated, but he received a taste of local resentment toward his policies when an Iraqi journalist hurled two shoes at him at a news conference.

Hours later, Bush made another unannounced stop, landing before dawn Monday in Afghanistan for a meeting with President Hamid Karzai at his Kabul palace.

In Iraq, Bush said the conflict “has not been easy” but was necessary for U.S. security, Iraqi stability and “world peace.” He hailed a recently signed but still controversial security pact as a sign of impending victory.

“There is still more work to be done. The war is not over,” Bush said, with Iraqi Prime Minister Nouri al-Maliki next to him. “But with the conclusion of this agreement . . . it is decidedly on its way to being won.”

Just after Bush finished his remarks and said “Thank you” in Arabic, an Iraqi journalist took off his shoes and threw them at Bush, one after the other.

Throwing a shoe at someone is considered the worst possible insult in Iraq and is meant to show extreme disrespect and contempt. When U.S. forces helped topple a statue of Iraqi ruler Saddam Hussein after rolling into Baghdad in April 2003, jubilant Iraqis beat the statue’s face with their shoes.

“This is a farewell kiss!” the man, identified as Muntadar al-Zaidi, a reporter with the Cairo-based al-Baghdadia television network, yelled in Arabic as he threw the first shoe. Bush, about 12 feet away, ducked and narrowly missed being hit. When Zaidi threw again, Maliki reached out his hand to shield the president.

Zaidi yelled “Dog, dog!” as he was surrounded by Iraqi security officers, who tackled him and began to beat him. Zaidi was later removed from the ornate room in the heavily fortified Green Zone where the news conference was taking place.

Bush was not injured and joked about the incident minutes later: “If you want the facts, it’s a size 10 shoe that he threw. Thank you for your concern; do not worry about it.”

Zaidi, colleagues said, was kidnapped by Shiite militiamen last year and was later released.

Bush’s fourth and presumably final visit as president to Iraq was intended to highlight improving security conditions in the war-torn country. After spending about 7 1/2 hours here, he departed on Air Force One near midnight.

During the flight to Bagram Air Base, Bush joked about the “bizarre” shoe-throwing incident but also said he did not think the episode indicated broader resentment among Iraqis. “I don’t think you can take one guy and say this represents a broad movement in Iraq,” he said.  And Bush told reporters that the mission in Afghanistan was “the same” as the one in Iraq: “To have the young democracy develop the institutions so it can survive on its own, not to repeat the mistakes of the 1980s, which is to achieve an objective and leave.” He added that the United States also aimed to “deny a safe haven for al-Qaeda.”

Upon landing, Bush addressed U.S. soldiers and Marines on the tarmac before boarding a helicopter for a flight to Kabul, where he met with Karzai. The Afghan leader greeted him warmly, the Associated Press reported, but Karzai also emphasized that the visit, Bush’s second to Afghanistan, came only after repeated requests. He said that he wished that Bush had more time and that the Afghan people could see Bush in person.

The veil of secrecy for the Afghanistan leg was even more opaque than that for Iraq, the trip coming as Afghanistan is being wracked by levels of violence unseen since the United States invaded in 2001.

That situation contrasts with declining violence across Iraq, which Bush referenced in describing that war as on the path to victory. Yet many areas in Iraq remain unstable, particularly in the north. Last week, at least 57 Iraqis were killed in a suicide attack at a popular restaurant outside the oil-rich city of Kirkuk.

More than 4,200 members of the U.S. military have died here since the 2003 invasion; the war has cost U.S. taxpayers $576 billion so far.

The improvement in security conditions in Iraq over the past year has had little discernible impact on the mood of the American public, which has said in polls that the invasion was a mistake. Bush said in a recent interview that faulty intelligence that preceded the war was his “biggest regret,” although he declined to say whether he would have changed course if he had known Saddam Hussein had no weapons of mass destruction.

On Sunday, Bush met with a series of Iraqi leaders about the recently completed security agreement, which calls for the withdrawal of U.S. forces by the end of 2011.

After meeting with Iraqi President Jalal Talabani at Salam Palace, Bush hailed the security agreement as “a reminder of our friendship and as a way forward to help the Iraqi people realize the blessings of a free society.”

Bush’s praise for the pact is particularly notable given that the U.S. administration spent years dismissing proposals for withdrawal timelines as dangerous admissions of defeat. The agreement came after months of hard bargaining by Iraqi leaders, who insisted on a firm date for the removal of U.S. troops.

Although Bush and his aides characterize the agreement as a sign of improvement, it is still divisive and may not last. A national referendum on the pact is required in the summer; rejection by the Iraqi public could speed the withdrawal of U.S. troops. The country’s top Shiite cleric, Grand Ayatollah Ali Sistani, has expressed concerns about the agreement. Opponents are railing against it.

Bush previously traveled to Iraq in November 2003, June 2006 and September 2007.

Bush’s farewell visits are part of a carefully orchestrated series of valedictory trips, speeches and interviews aimed at highlighting his administration’s record on a variety of issues, including terrorism and the fight against AIDS. The effort has largely been overshadowed, however, by the ongoing economic crisis and by President-elect Barack Obama’s preparations for his arrival at the White House.  Last week in a speech at the U.S. Military Academy in West Point, N.Y., Bush vigorously defended the wars in Iraq and Afghanistan and argued that his administration had “laid a solid foundation” for Obama overseas. Bush also urged Obama to “stay on the offensive” against al-Qaeda and other terrorist groups.

Obama has urged shifting U.S. troops from Iraq to Afghanistan, calling the situation in the latter country an “urgent crisis.” Defense Secretary Robert M. Gates said Thursday in Kandahar, Afghanistan, that thousands of additional troops would head there by next summer.

Bush drew acclaim from leaders in both countries. Talabani, speaking in English, called Bush a “great friend” who had “helped to liberate” Iraq. “Thanks to him and his courageous leadership, we are here,” he said.

Maliki thanked Bush for his support. “Today, Iraq is moving forward in every field,” Maliki said before the shoe incident.

And Karzai said, “I and the Afghan people are very proud and honored to the profoundest depth of our hearts to have President Bush with us here today.”

After the chaotic news conference, Bush went to Camp Victory, where hundreds of U.S. troops greeted him with cheers and whoops. “Thanks to you, the Iraq we’re standing in today is dramatically freer, dramatically safer and dramatically better than the Iraq we found eight years ago,” Bush said, positioned beneath an enormous American flag.

After Bush left Iraq, the al-Baghdadia network released a statement demanding Zaidi’s release from Iraqi custody “to spare his life.” It was unclear Sunday night what charges he might face for throwing the shoes.   “Any step taken against him will be a reminder of the dictatorial time and the violence and lack of freedom that Iraqis faced,” the statement said.