Do you wonder why former President Bill Clinton is vigorously giving speeches throughout the country? It is because he is trying to legitimize his presidency. He is just above Jimmy Carter as one of the most aloof presidents we had in this country. In fact, he hasn’t done anything worth mentioning. He lived under the success from the Ronald Reagan legacy. In fact, I think Bill Clinton’s main talking points at these speaking engagements is to blame the economic ills on various people; but in reality, Clinton is the one who should be blamed for the economic woes we are currently in.
When President Clinton was president his terms was characterized by economic prosperity and financial deregulation, which in many ways set the stage for the excesses of recent years. Among his biggest strokes of free-wheeling capitalism was the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, a cornerstone of Depression-era regulation. The repeal enabled commercial lenders such as Citigroup, which was in 1999 then the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles that bought those securities. It is therefore seen that the repeal of this act is directly responsible for the Global financial crisis.
That was not enough for former President Clinton. He also signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. The Commodity Futures Modernization Act of 2000 has received criticism for the so-called "Enron loophole," which exempts most over-the-counter energy trades and trading on electronic energy commodity markets. This was one of the big reasons for the collapse of Enron.
Not convinced yet? In 1995 Clinton loosened housing rules by rewriting the Community Reinvestment Act, which put added pressure on banks to lend in low-income neighborhoods. All these rules changes played a role in creating a permissive lending environment. This in turn led to more loans being given to people who really could not afford them, leading to defaults today.
I will also fault Clinton for retaining Alan Greenspan. The financial crisis has many origins - among consumers, among banks, and in government. But Greenspan kept rates low, and financial institutions sought any sort of instrument that would pay more than the low interest rates. This created an enormous market for mortgage-backed securities. Nobody cared about loan underwriting any more, since it would be immediately sold to some investor somewhere.
After all of this, do you believe our former president when he says to the media, "I am not at fault for any of this financial mess? Do you believe if my economic team was in place that any of this would have happened?"
My answer is yes I do - after reading about all the things he did in great detail; I put part of the blame squarely on his broad shoulders. To deny he had nothing to do with it seems like he is trying to rewrite history. What do you think?