Clinton's Legacy: The Financial and Housing Meltdown

By:  Sheldon Richman
10/15/2012
       
Clinton's Legacy: The Financial and Housing Meltdown

Bill Clinton is certainly full of himself these days. That might have something to do with the fact that no one is likely to ask why he hasn’t owned up to his share of the blame for the housing and financial bust.

Bill Clinton is certainly full of himself these days. That might have something to do with the fact that no one is likely to ask why he hasn’t owned up to his share of the blame for the housing and financial bust.

The former president is treated like an elder statesman whose tenure in office was so good that even some Republicans look back fondly on it. On the surface his economic record looks good, but it would be rash to credit Clinton. During his time in office the information revolution took off, boosting productivity and economic growth. And when his Democratic Party lost control of Congress in 1992, Clinton had to accept spending restraints, which meant less government obstruction to economic growth.

Clinton, however, sowed the seeds of the Great Recession by helping to inflate the housing bubble, a key part of the financial debacle of 2007. But this wasn’t because he (not George W. Bush) signed two financial deregulation bills. Although Clinton legalized interstate banking in 1994 and commercial/investment banking combinations in 1999, that had nothing to do with the meltdown.

Then why is Clinton culpable? Because his secretary of housing and urban development, Andrew Cuomo, current governor of New York and a likely 2016 presidential aspirant, accelerated easy-housing policies and inflated the housing bubble, setting the stage for its collapse.

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Sheldon Richman is senior fellow at The Future of Freedom Foundation and editor of The Freeman magazine.

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