BLAME CLINTON AND OBAMA, NOT JUST BUSH

50 Shades of Bush Blame
http://finance.townhall.com/columnists/shawnmitchell/2012/12/31/50-shades-of-bush-blame-n1476434/page/full/
Townhall – Shawn Mitchell – 12/31/2012

Clinton’s record can’t be assessed out of context: six of his eight budgets were Republican documents (recall the pre-banana republic era, when Congress actually passed national budgets, and the media would have savaged congressional leaders who refused); his economy and tax revenues were buoyed on the twin bubbles of early dot.com euphoria and Alan Greenspan’s loose exuberance; and after his ’94 rebuke by voters impelled him to declare big government dead, he generally governed moderately, playing strategic small ball, promoting global trade, and keeping largely out of the way of industry and the economy.

Bush deregulated very little. It was Clinton who signed the repeal of Glass-Steagall, allowing depository banks to participate in commercial banking and equity ventures. This broke firewalls that had protected depositors for decades.

Perhaps most critically, Clinton pumped risk and volatility into the finance and housing sectors. He pushed hard on banks to loosen standards and expand home loans under Carter’s Community Reinvestment Act. He authorized government sponsored enterprises Fannie Mae and Freddy Mac to buy subprime securities. That created a market for bundled mortgages. Thus, Clinton greatly expanded lucrative incentives for “predatory lending” that critics would in time blame fully on the private sector.

All of this contributed to the dynamite that exploded in 2008. The smoke and soot are on Bush, but the fingerprints are Clinton’s.

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