Even Wikipedia has decency to credit Clinton as one of the architects of the bubble.
Increasing home ownership has been the goal of several presidents including Roosevelt, Reagan,
Clinton, and
George W. Bush.
[2]
Repeal of the Glass Steagall Act[edit]
The
Glass–Steagall Act was enacted after the
Great Depression. It separated commercial banks and investment banks, in part to avoid potential conflicts of interest between the lending activities of the former and rating activities of the latter. In 1999, President Bill Clinton signed into law
Gramm-Leach-Bliley Act, which repealed portions of the Glass-Steagall Act. Economist
Joseph Stiglitz criticized the repeal of the Act. He called its repeal the "culmination of a $300 million lobbying effort by the banking and financial services industries..." He believes it contributed to this crisis because the risk-taking culture of investment banking dominated the more risk-averse commercial banking culture, leading to increased levels of risk-taking and leverage during the boom period.
[17]
"The National Homeownership Strategy: Partners in the American Dream", was compiled in 1995 by Henry Cisneros, President Clinton's HUD Secretary. This 100-page document represented the viewpoints of HUD, Fannie Mae, Freddie Mac, leaders of the housing industry, various banks, numerous activist organizations such as ACORN and La Raza, and representatives from several state and local governments."
[138] The strategy was not limited to the loan purchases of Fannie and Freddie, or to Community Reinvestment Act loans. "This was a broad, governmental plan for the entire lending industry, comprising '100 proposed action items,' ostensibly designed to 'generate up to 8 million additional homeowners' in America.
[139]
Policies of the Clinton Administration[edit]
As noted, the National Homeownership Strategy, which advocated a general loosening of lending standards, at least with regard to affordable housing, was devised in 1995 by HUD under the Clinton Administration. During the rest of the Clinton Administration HUD set increasingly rigorous affordable housing loan requirements for Fannie and Freddie.
In 1995 the Clinton Administration made changes to the CRA. The changes were extensive and, in the opinion of critics, very destructive. Under the new rules, banks and thrifts were to be evaluated "based on the number and amount of loans issued within their assessment areas, the geographical distribution of those loans, the distribution of loans based on borrower characteristics, the number and amount of community development loans, and the amount of innovation and flexibility they used when approving loans."
[153]Some analysts maintain that these new rules pressured banks to make weak loans.
[154]
Government policies and the subprime mortgage crisis - Wikipedia, the free encyclopedia
The article goes and on, it seems Clinton gets more blame than anything, or anyone else. And let's not forget Bill was at helm during the creation of NASDAQ bubble too.
These people are poison to any economy.
