You are going to love this: Bill Clinton did it... The economy

Did Clinton cause the banking crisis?

A trio of regulatory changes and missteps on the former president's watch let the banks run wild and encouraged the housing bubble. But he had help, of course.

By David Weidner, MarketWatch
On Wall Street and Main Street they call William Jefferson Clinton the "Comeback Kid," but it's not because of some Election Day surprise.

It's because almost everything he did regarding financial-services regulation has come back to haunt us.

If it wasn't apparent before, the former president's handiwork became clear when President Barack Obama announced his plans for sweeping financial-services reforms. Obama's efforts to bring fair dealing to the mortgage markets, rules to the derivatives marketplace and restraint to big financial companies underscore the missteps of Clinton's second term.

We had weakly regulated markets when Clinton took office, but by the time he left, they were an invitation to lawless dealing. For the ease of it, Willie Sutton would have traded his gun and mask for a briefcase and necktie.

Clinton created a fertile environment for home-lending charlatans and hiding places for Wall Street swindlers, and upset a regulatory structure that had served the financial marketplace so well for more than six decades.

3 big mistakes
Clinton bashing -- like Bush bashing -- is often a cop-out, but Clinton made critical mistakes when it came to dealing with the financial industry. Three poor decisions stand out.

The first, in 1997, was a change to the amount of taxes a homeowner had to pay on the sale of his or her home, up to $500,000. That change effectively made buying and selling a home for profit the most compelling investment in America by tax standards. It shifted our housing market from one of supply and demand to one of rampant speculation.

The second mistake was one of inaction. In 1998, Long-Term Capital Management's use of derivatives and leverage required a massive $3.6 billion hedge fund bailout organized by the New York Federal Reserve Bank. After the fiasco rocked the markets, the administration was on the spot. Would it push for tighter regulation of this new form of investment vehicle? Would it rein in the derivatives markets?

Alan Greenspan and Arthur Levitt, then the chairmen of the Federal Reserve and the Securities and Exchange Commission, respectively, and Clinton's Treasury secretary, Robert Rubin, all counseled against it to varying degrees. No action was taken.

http://articles.moneycentral.msn.com/Investing/Extra/did-clinton-cause-the-banking-crisis.aspx


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ago!!

Nothing titilates Republicon Homelander Family Values interest quite like The Clenis

You'd think the framers of the Constitution would have protected U.S. from having that kind of power vested in any single person.

Oh, wait, they did.

by himself?

no.

does he, like all presidents who did not keep regulations current and up to date to protect against the "geniuses" in the american industries from going off the reservation? certainly.

The old leverage allotment was 10:1
After the cap was lifted, banks were allowed to do whatever they wanted. 30:1, 40:1, 1000:1, there was no limit.

seems to take no responsibility for anything they do. how is that. you expect ME to take personal responsibility for my choices and face the consequences of those choices or mistakes, yet YOU are not to blame for anything, no matter what it is. it's someone else's fault.

Ross Perot was right about NAFTA! There has been a huge sucking sound from all the jobs leaving America. These jobs are not coming back and it is likely that the decline in the American standard of living began in earnest at the signing of that legislation.

prior to turning the country over to Bush, who certainly wasn't about to make repairs.