# Housing crisis started with Clinton? **URL:** \ **Category:** Great Debates\ **Created:** [September 18, 2008, 7:01pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189 "2008-09-18T19:01:30Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![control-z](https://avatars.discourse-cdn.com/v4/letter/c/eada6e/32.png) [@control-z](https://boards.straightdope.com/u/control-z)\ **Post date:** [September 18, 2008, 7:01pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/1 "2008-09-18T19:01:30Z")
Interesting article: [http://ibdeditorial.com/IBDArticles.aspx?id=306370789279709](http://ibdeditorial.com/IBDArticles.aspx?id=306370789279709) > [@](#): > > The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but “predatory.” > > Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck. > > And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America. What’s the story on IBD? Insightful or conservative-leaning publication? Additionally, McCain seems to have realized in 2006 that Fannie and Freddie were headed towards disaster: [http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190#sMonofilemx003Ammx002Fmmx002Fmmx002Fmhomemx002Fmgovtrackmx002Fmdatamx002Fmusmx002Fm109mx002Fmcrmx002Fms20060525-16.xmlElementm0m0m0m](http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190#sMonofilemx003Ammx002Fmmx002Fmmx002Fmhomemx002Fmgovtrackmx002Fmdatamx002Fmusmx002Fm109mx002Fmcrmx002Fms20060525-16.xmlElementm0m0m0m) ---
**Author:** ![squeegee](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/squeegee/32/14537_2.png) [@squeegee](https://boards.straightdope.com/u/squeegee)\ **Post date:** [September 18, 2008, 7:30pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/2 "2008-09-18T19:30:13Z")
I must have missed the memo – I thought everything was Obama’s fault. No? Wow, that is some world class ass-covering. Eight years of the Fed’s policies, eight years of loose oversight of banks, eight years of incompetence and inaction by the Bush administration. All that had no effect whatsoever, its all Clinton’s fault. Oh, and those pesky minorities. I’ll tentatively give McCain his props on trying to oversee Fanny and Freddie, though. ---
**Author:** ![Euphonious\_Polemic](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/euphonious_polemic/32/3002_2.png) [@Euphonious\_Polemic](https://boards.straightdope.com/u/Euphonious_Polemic)\ **Post date:** [September 18, 2008, 7:34pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/3 "2008-09-18T19:34:26Z")
I personally lay the blame on Thog, who moved out of the nice safe cave and built a lean-to out of sticks. ---
**Author:** ![Renob](https://avatars.discourse-cdn.com/v4/letter/r/8c91f0/32.png) [@Renob](https://boards.straightdope.com/u/Renob)\ **Post date:** [September 18, 2008, 7:50pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/4 "2008-09-18T19:50:16Z")
It’s pretty undeniable that if the subprime mortgage meltdown is at the root of this crisis (and I think that is probably a debate point, but many are making it) then the government policies that were enacted to encourage subprime lending to certain groups of people has a large share of the blame. It appears this started under Clinton. However, Bush was completely in favor of this time of lending, too, and he strongly pushed HUD to “expand homeownership” in this way. People want to cast this as some sort of breakdown of the free market. A much more accurate target is these types of government programs that tried to circumvent the market and encourage lending to groups that lenders avoided previously. ---
**Author:** ![Hamlet](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hamlet/32/2818_2.png) [@Hamlet](https://boards.straightdope.com/u/Hamlet)\ **Post date:** [September 18, 2008, 7:53pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/5 "2008-09-18T19:53:36Z")
> [@Euphonious\_Polemic](#): > > I personally lay the blame on Thog, who moved out of the nice safe cave and built a lean-to out of sticks. I thought you were going to do a big no-no and blame Og. OG SMASH! ---
**Author:** ![Stuffy](https://avatars.discourse-cdn.com/v4/letter/s/f17d59/32.png) [@Stuffy](https://boards.straightdope.com/u/Stuffy)\ **Post date:** [September 18, 2008, 8:20pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/6 "2008-09-18T20:20:01Z")
So let me get this straight. The editorialist contends that the Clinton administration created a market out of whole cloth, then forced institutions to lend to it? Nice try, the article did excel in getting those code words out there though with a special high five for getting Janet Reno’s name it there. How nice. It’s Clinton and those niggers fault! Unfucking believable. ---
**Author:** ![RyJae](https://avatars.discourse-cdn.com/v4/letter/r/9d8465/32.png) [@RyJae](https://boards.straightdope.com/u/RyJae)\ **Post date:** [September 18, 2008, 8:24pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/7 "2008-09-18T20:24:56Z")
> [@control-z](#): > > Interesting article: > > [http://ibdeditorial.com/IBDArticles.aspx?id=306370789279709](http://ibdeditorial.com/IBDArticles.aspx?id=306370789279709) > > What’s the story on IBD? Insightful or conservative-leaning publication? > Additionally, McCain seems to have realized in 2006 that Fannie and Freddie were headed towards disaster: > > [http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190#sMonofilemx003Ammx002Fmmx002Fmmx002Fmhomemx002Fmgovtrackmx002Fmdatamx002Fmusmx002Fm109mx002Fmcrmx002Fms20060525-16.xmlElementm0m0m0m](http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190#sMonofilemx003Ammx002Fmmx002Fmmx002Fmhomemx002Fmgovtrackmx002Fmdatamx002Fmusmx002Fm109mx002Fmcrmx002Fms20060525-16.xmlElementm0m0m0m) Everyone that pushed the “new improved” bankruptcy legislation in 2005 knew what was coming. ---
**Author:** ![IdahoMauleMan](https://avatars.discourse-cdn.com/v4/letter/i/71c47a/32.png) [@IdahoMauleMan](https://boards.straightdope.com/u/IdahoMauleMan)\ **Post date:** [September 18, 2008, 8:25pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/8 "2008-09-18T20:25:47Z")
> [@Stuffy](#): > > So let me get this straight. The editorialist contends that the Clinton administration created a market out of whole cloth, then forced institutions to lend to it? Nice try, the article did excel in getting those code words out there though with a special high five for getting Janet Reno’s name it there. How nice. It’s Clinton and those niggers fault! Unfucking believable. It’s doubtful Clinton wins the closest-to-the-pin contest on this one. Barney Frank and Chris Dodd, maybe. But not the libidous one, IMHO. Negative real interest rates by the Fed, and a government-sponsored vehicle to pump as much through the goose with that cheap money as possible (Freddie and Fannie) probably, in combination, land 3 feet from the stick with a chance for birdie. And yes, I know Freddie and Fannie only dabbled a bit in Alt-A and subprime paper, but I fully subscribe to the ‘crowding out’ theory, in that by sucking up all the conforming loans the two behemoths incented other banks and investors to walk further out the plank. ---
**Author:** ![Shayna](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/shayna/32/17976_2.png) [@Shayna](https://boards.straightdope.com/u/Shayna)\ **Post date:** [September 18, 2008, 8:27pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/9 "2008-09-18T20:27:04Z")
This crisis has its history in the Lobbying industry, going back as far as the 1960s, but the real shit storm we’re facing actually took root in the Federal Reserve during **Regan’s** tenure. PBS’s Frontline did a pretty good historical outline of the events, [here](http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html) > [@](#): > > . . . > > In March 1987, the Fed approves an application by Chase Manhattan to engage in underwriting commercial paper, applying the same reasoning as in the 1986 Bankers Trust decision, and in April it issues an order outlining its rationale. While the Board remains sensitive to concerns about mixing commercial banking and underwriting, it states its belief that the original Congressional intent of “principally engaged” allowed for some securities activities. The Fed also indicates that it will raise the limit from 5 percent to 10 percent of gross revenues at some point in the future. The Board believes the new reading of Section 20 will increase competition and lead to greater convenience and increased efficiency. > > In August 1987, Alan Greenspan – formerly a director of J.P. Morgan and a proponent of banking deregulation – becomes chairman of the Federal Reserve Board. One reason Greenspan favors greater deregulation is to help U.S. banks compete with big foreign institutions. > > **In January 1989, the Fed Board approves an application by J.P. Morgan, Chase Manhattan, Bankers Trust, and Citicorp to expand the Glass-Steagall loophole to include dealing in debt and equity securities in addition to municipal securities and commercial paper.** This marks a large expansion of the activities considered permissible under Section 20, because the revenue limit for underwriting business is still at 5 percent. Later in 1989, the Board issues an order raising the limit to 10 percent of revenues, referring to the April 1987 order for its rationale. > > [The Bush Administration tried several times, unsuccessfully, to repeal Glass-Steagal during the early '90s] > > [Mergers and deals and crap ensue over the next several years] > > In May 1998, the [Republican controlled] House passes legislation by a vote of 214 to 213 that allows for the merging of banks, securities firms, and insurance companies into huge financial conglomerates. And in September, the Senate Banking Committee votes 16-2 to approve a compromise bank overhaul bill. Despite this new momentum, Congress is yet again unable to pass final legislation before the end of its session. > > **As the push for new legislation heats up, lobbyists quip that raising the issue of financial modernization really signals the start of a fresh round of political fund-raising. Indeed, in the 1997-98 election cycle, the finance, insurance, and real estate industries (known as the FIRE sector), spends more than $200 million on lobbying and makes more than $150 million in political donations. Campaign contributions are targeted to members of Congressional banking committees and other committees with direct jurisdiction over financial services legislation.** > > After 12 attempts in 25 years, Congress finally repeals Glass-Steagall, rewarding financial companies for more than 20 years and $300 million worth of lobbying efforts. Supporters hail the change as the long-overdue demise of a Depression-era relic. > > On Oct. 21, with the House-Senate conference committee deadlocked after marathon negotiations, the main sticking point is partisan bickering over the bill’s effect on the Community Reinvestment Act, which sets rules for lending to poor communities. Sandy Weill calls President Clinton in the evening to try to break the deadlock after Senator Phil Gramm, chairman of the Banking Committee, warned Citigroup lobbyist Roger Levy that Weill has to get White House moving on the bill or he would shut down the House-Senate conference. Serious negotiations resume, and a deal is announced at 2:45 a.m. on Oct. 22. Whether Weill made any difference in precipitating a deal is unclear. > > . . . I dismiss out of hand, any editorial that uses the word “cronies” multiple times, as being biased sources. YMMV. ---
**Author:** ![IdahoMauleMan](https://avatars.discourse-cdn.com/v4/letter/i/71c47a/32.png) [@IdahoMauleMan](https://boards.straightdope.com/u/IdahoMauleMan)\ **Post date:** [September 18, 2008, 8:30pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/10 "2008-09-18T20:30:26Z")
> [@Shayna](#): > > This crisis has its history in the Lobbying industry, going back as far as the 1960s, but the real shit storm we’re facing actually took root in the Federal Reserve during **Regan’s** tenure. PBS’s Frontline did a pretty good historical outline of the events, [here](http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html) I dismiss out of hand, any editorial that uses the word “cronies” multiple times, as being biased sources. YMMV. As do I. Well played, Shayna. Well played. ---
**Author:** ![Shayna](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/shayna/32/17976_2.png) [@Shayna](https://boards.straightdope.com/u/Shayna)\ **Post date:** [September 18, 2008, 8:32pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/11 "2008-09-18T20:32:44Z")
Thank you very much. 🙂 ---
**Author:** ![Stuffy](https://avatars.discourse-cdn.com/v4/letter/s/f17d59/32.png) [@Stuffy](https://boards.straightdope.com/u/Stuffy)\ **Post date:** [September 18, 2008, 8:35pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/12 "2008-09-18T20:35:20Z")
I somehow cut off the second hald of my post which was "If you want to blame a single individual, I’d look to Phil Graham REPUBLICAN. You want a group try the Republican controlled congress which passed the Gramm-Leach-Bliley Act. " I see **Shayna’s** post covers it. I think I need to go back into lurk mode. This campaign is turning me into one of those bitter black men. ---
**Author:** ![IdahoMauleMan](https://avatars.discourse-cdn.com/v4/letter/i/71c47a/32.png) [@IdahoMauleMan](https://boards.straightdope.com/u/IdahoMauleMan)\ **Post date:** [September 18, 2008, 8:39pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/13 "2008-09-18T20:39:37Z")
> [@Stuffy](#): > > I somehow cut off the second hald of my post which was > > "If you want to blame a single individual, I’d look to Phil Graham REPUBLICAN. You want a group try the Republican controlled congress which passed the Gramm-Leach-Bliley Act. " > > I see **Shayna’s** post covers it. > > I think I need to go back into lurk mode. This campaign is turning me into one of those bitter black men. Trying to blame a single individual, political party and the GLB act for the housing crisis is like blaming improved carburetors for deaths on the highway. ---
**Author:** ![Stuffy](https://avatars.discourse-cdn.com/v4/letter/s/f17d59/32.png) [@Stuffy](https://boards.straightdope.com/u/Stuffy)\ **Post date:** [September 18, 2008, 8:47pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/14 "2008-09-18T20:47:39Z")
> [@IdahoMauleMan](#): > > Trying to blame a single individual, political party and the GLB act for the housing crisis is like blaming improved carburetors for deaths on the highway. It was an attempt at Synchronicity, by engaging in the same behavior (although I hope less slimy) as the author of the editorial. Why am I having to to explain myself so much lately? Must be my AAVE. ---
**Author:** ![RyJae](https://avatars.discourse-cdn.com/v4/letter/r/9d8465/32.png) [@RyJae](https://boards.straightdope.com/u/RyJae)\ **Post date:** [September 18, 2008, 8:50pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/15 "2008-09-18T20:50:34Z")
> [@Stuffy](#): > > I somehow cut off the second hald of my post which was > > "If you want to blame a single individual, I’d look to Phil Graham REPUBLICAN. You want a group try the Republican controlled congress which passed the Gramm-Leach-Bliley Act. " > > I see **Shayna’s** post covers it. > > I think I need to go back into lurk mode. This campaign is turning me into one of those bitter black men. Or you can blame Robert Rubin ,Secretary of the Treasury, under both terms of Clinton. He supported both parts of Gramms ripping apart speedbumps to a depression. Who is … an adviser to Obama now. Bottom line both parties screwed the pooch and in this case the American people are the pooch. Now we just have to elect a whole new set of politicians, who will find a new way to screw us. Yah politics! ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [September 18, 2008, 8:50pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/16 "2008-09-18T20:50:57Z")
No, it didn’t start with Clinton. It was a combination of dozens, or even hundreds of factors - many of them positive things. Numerous politicans contributed, sometimes without even recognizing they were dealing with some economic issue. ---
**Author:** ![IdahoMauleMan](https://avatars.discourse-cdn.com/v4/letter/i/71c47a/32.png) [@IdahoMauleMan](https://boards.straightdope.com/u/IdahoMauleMan)\ **Post date:** [September 18, 2008, 8:54pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/17 "2008-09-18T20:54:13Z")
> [@smiling\_bandit](#): > > No, it didn’t start with Clinton. It was a combination of dozens, or even hundreds of factors - many of them positive things. Numerous politicans contributed, sometimes without even recognizing they were dealing with some economic issue. Now that’s a great comment! ---
**Author:** ![Stuffy](https://avatars.discourse-cdn.com/v4/letter/s/f17d59/32.png) [@Stuffy](https://boards.straightdope.com/u/Stuffy)\ **Post date:** [September 18, 2008, 8:54pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/18 "2008-09-18T20:54:31Z")
> [@RyJae](#): > > Or you can blame Robert Rubin ,Secretary of the Treasury, under both terms of Clinton. He supported both parts of Gramms ripping apart speedbumps to a depression. Who is … an adviser to Obama now. > > Bottom line both parties screwed the pooch and in this case the American people are the pooch. Now we just have to elect a whole new set of politicians, who will find a new way to screw us. Yah politics! Look up. ---
**Author:** ![RyJae](https://avatars.discourse-cdn.com/v4/letter/r/9d8465/32.png) [@RyJae](https://boards.straightdope.com/u/RyJae)\ **Post date:** [September 18, 2008, 8:55pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/19 "2008-09-18T20:55:55Z")
> [@Stuffy](#): > > Look up. Sorry I missed that. 🙂 Really sad thing is instead of D or R next to the names they should just put P for Politician it would solve so much. ---
**Author:** ![ExTank](https://avatars.discourse-cdn.com/v4/letter/e/35a633/32.png) [@ExTank](https://boards.straightdope.com/u/ExTank)\ **Post date:** [September 18, 2008, 9:05pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/20 "2008-09-18T21:05:21Z")
I think we could still use “D” and “R,” as long as “D” stood for “Dead” and “R” stood for “Running For Their Fucking Lives.” [Next page](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189.md?page=2)