# 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:** 2
**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, 9:18pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/21 "2008-09-18T21:18:34Z")
> [@RyJae](#): > > 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. No prob. 😉 ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [September 19, 2008, 1:48am UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/22 "2008-09-19T01:48:04Z")
> [@control-z](#): > > What’s the story on IBD? Insightful or conservative-leaning publication? [The latter.](http://en.wikipedia.org/wiki/Investor%27s_Business_Daily) > [@](#): > > Investors Business Daily also carries editorials and columns on topics from “economics and government to politics and culture”[2]. The page takes a free-market view of economic issues and an often conservative view of American foreign policy. It carries columns from writers “On The Left and On The Right”[3], including L. Brent Bozell, Richard Cohen, E. J. Dionne, Victor Davis Hanson, Charles Krauthammer, and Thomas Sowell. Pulitzer-winning cartoonist Michael Ramirez has worked for IBD since late 2005. Investors Business Daily also publishes editorials skeptical of peak oil and global warming, often proposing alternate solutions. ---
**Author:** ![Marley23](https://avatars.discourse-cdn.com/v4/letter/m/45deac/32.png) [@Marley23](https://boards.straightdope.com/u/Marley23)\ **Post date:** [September 19, 2008, 1:59am UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/23 "2008-09-19T01:59:23Z")
> [@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. I think that’s well said. I do love assigning credit and blame for economic conditions to individuals, though. If you will think back a few years, conservatives credited Reagan and George H. W. Bush for the economic expansion that happened under Clinton. Then, when the economy started coming out of the doldrums a few years ago, I heard talk of the “Bush [43] Boom;” the recession or slowdown of the previous years started under Clinton and it was his fault. Now it turns out the housing crisis started under Clinton? Come on. Economics is complex and this is a simple case of people taking credit for their side on anything good, and passing along blame for anything bad. You could find examples of the left doing the same thing, I’m sure, but in this case it’s pretty clear what’s happening. ---
**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 19, 2008, 2:21am UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/24 "2008-09-19T02:21:02Z")
> [@squeegee](#): > > I’ll tentatively give McCain his props on trying to oversee Fanny and Freddie, though. Yeah it’s nice to see that McCain has (had) some sense, more than he’s showing in this election. ---
**Author:** ![Huerta88](https://avatars.discourse-cdn.com/v4/letter/h/82dd89/32.png) [@Huerta88](https://boards.straightdope.com/u/Huerta88)\ **Post date:** [September 20, 2008, 3:20pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/25 "2008-09-20T15:20:51Z")
I know [worldnet.com](http://worldnet.com) leans right, but this guy’s done a decent job of collecting some cites to past events: > **[Guess again who's to blame for U.S. mortgage meltdown](https://www.wnd.com/2008/09/75717/)** > > Stan J. Liebowitz While many pundits are pointing to corporate greed and a lack of government regulation as the cause for the American mortgage and financial crisis, some analysts are saying it wasn't too little government intervention that cased the... ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [September 20, 2008, 5:43pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/26 "2008-09-20T17:43:16Z")
It started with Reagan. He wanted the foot of regulation off the neck of business. He started the process continued with relish by every repub since. Clinton is responsible for NAFTA. He also signed the Gramm bill gutting Glass /Steagall. That is bad enough. ---
**Author:** ![suranyi](https://avatars.discourse-cdn.com/v4/letter/s/e36b37/32.png) [@suranyi](https://boards.straightdope.com/u/suranyi)\ **Post date:** [September 20, 2008, 6:25pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/27 "2008-09-20T18:25:23Z")
> [@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? Investor’s Business Daily is well-known for having a very conservative editorial point of view. To give you an idea, they are to the right of the Wall Street Journal. Ed ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [September 20, 2008, 8:34pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/28 "2008-09-20T20:34:53Z")
> [@IdahoMauleMan](#): > > 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. That about nails it. It’s a combination of a push for lower income home ownership, a low interest rate that begs to be used by banks and a backing by Freddie and Fannie. Add to that decades of appreciation above the inflation rate and you have a housing bubble looking for a reason to burst. Mortgages with little or no down payment were never a good idea. Congress is responsible for laws regulating the banking industry and they’re going to adjourn without addressing it this year. Apparently they need the time off to work on their approval numbers. ---
**Author:** ![IdahoMauleMan](https://avatars.discourse-cdn.com/v4/letter/i/71c47a/32.png) [@IdahoMauleMan](https://boards.straightdope.com/u/IdahoMauleMan)\ **Post date:** [September 20, 2008, 8:57pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/29 "2008-09-20T20:57:38Z")
> [@Magiver](#): > > That about nails it. It’s a combination of a push for lower income home ownership, a low interest rate that begs to be used by banks and a backing by Freddie and Fannie. Add to that decades of appreciation above the inflation rate and you have a housing bubble looking for a reason to burst. Mortgages with little or no down payment were never a good idea. > > Congress is responsible for laws regulating the banking industry and they’re going to adjourn without addressing it this year. Apparently they need the time off to work on their approval numbers. Excellent! A voice of sanity in the wilderness. Have any interest in popping over to the ‘Does Obama understand the Economy’ thread and throwing a bone in, every now and then? I’m dying over there, man. Just dying. Could use a little intellectual horsepower - from the Left or Right, don’t care - to keep the juices flowing. ---
**Author:** ![Zoe](https://avatars.discourse-cdn.com/v4/letter/z/a4c791/32.png) [@Zoe](https://boards.straightdope.com/u/Zoe)\ **Post date:** [September 20, 2008, 9:36pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/30 "2008-09-20T21:36:52Z")
**Stuffy** , don’t make me come over there and nail your wrists to your computer desk. Your insights are appreciated. This campaign is wearing me out emotionally. ---
**Author:** ![Chief\_Pedant](https://avatars.discourse-cdn.com/v4/letter/c/a6a055/32.png) [@Chief\_Pedant](https://boards.straightdope.com/u/Chief_Pedant)\ **Post date:** [September 20, 2008, 10:51pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/31 "2008-09-20T22:51:29Z")
Lenders have historically blown off the unfortunate because they don’t trust 'em to make sound financial decisions, including how to borrow. So first you create a well-intentioned program to help the unfortunate. Then you incent mortgage brokers to make money off the program by creating mortgages the risk for which they will never bear because the paper is sold to other institutions. You let other institututions make even more money by pretending that all mortgage paper is sort of about the same risk. By the time the paper has changed hands and been rebundled a few times it’s easy to pretend Bozo Nitwit is as good a borrower as anyone else. Everyone sort of conveniently forgets that the money has been lent to the historically incompetent; there are reasons they are poor in the first place and chief among those reasons is bad management of life decisions. When it comes time for the accounting, the unfortunate can blame predatory practices for taking advantage of their incompetence and the wealthy can blame bleeding hearts who thought it was a good idea to let financially incompetent people borrow money. ---
**Author:** ![Moriarty](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/moriarty/32/49_2.png) [@Moriarty](https://boards.straightdope.com/u/Moriarty)\ **Post date:** [September 21, 2008, 12:24am UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/32 "2008-09-21T00:24:46Z")
> [@IdahoMauleMan](#): > > Excellent! A voice of sanity in the wilderness. Have any interest in popping over to the ‘Does Obama understand the Economy’ thread and throwing a bone in, every now and then? > > I’m dying over there, man. Just dying. Could use a little intellectual horsepower - from the Left or Right, don’t care - to keep the juices flowing. I firmly agree with both of your comments, and I’m voting for Obama. Perhaps I need to see about what you said in that other thread, too. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [September 21, 2008, 1:10am UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/33 "2008-09-21T01:10:08Z")
> [@Chief\_Pedant](#): > > Lenders have historically blown off the unfortunate because they don’t trust 'em to make sound financial decisions, including how to borrow. > > So first you create a well-intentioned program to help the unfortunate. > > Then you incent mortgage brokers to make money off the program by creating mortgages the risk for which they will never bear because the paper is sold to other institutions. > > You let other institututions make even more money by pretending that all mortgage paper is sort of about the same risk. By the time the paper has changed hands and been rebundled a few times it’s easy to pretend Bozo Nitwit is as good a borrower as anyone else. > > Everyone sort of conveniently forgets that the money has been lent to the historically incompetent; there are reasons they are poor in the first place and chief among those reasons is bad management of life decisions. > > When it comes time for the accounting, the unfortunate can blame predatory practices for taking advantage of their incompetence and the wealthy can blame bleeding hearts who thought it was a good idea to let financially incompetent people borrow money. All we needed was a regulation of the industry. Maintaining lending standards and overseeing the mortgage originators was important. We did nothing. The originators came up with the idea of faking wages and net worth. The borrowers were told by “experts that it is alright” and would work out in the long run. Their crime was wanting a house that was a stretch and trusting mortgage experts. ---
**Author:** ![Magiver](https://avatars.discourse-cdn.com/v4/letter/m/4491bb/32.png) [@Magiver](https://boards.straightdope.com/u/Magiver)\ **Post date:** [September 21, 2008, 3:00am UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/34 "2008-09-21T03:00:36Z")
> [@gonzomax](#): > > All we needed was a regulation of the industry. Maintaining lending standards and overseeing the mortgage originators was important. We did nothing. The originators came up with the idea of faking wages and net worth. The borrowers were told by “experts that it is alright” and would work out in the long run. Their crime was wanting a house that was a stretch and trusting mortgage experts. What the heck are you talking about? We HAVE a regulated industry. We also have a government program designed to promote low equity loans to people who would normally not qualify for a mortgage. People without any equity in their house have nothing to tap into when faced with economic problems. Add that to that a market adjustment to houses and you end up with someone with negative equity. If you don’t have any equity in a home then you’ve lost nothing. The mortgage payment becomes rent. If it’s a negative equity then the bank loses money. The crime was government intervention in a market process that relied on positive equity loans to maintain stability. ---
**Author:** ![Chief\_Pedant](https://avatars.discourse-cdn.com/v4/letter/c/a6a055/32.png) [@Chief\_Pedant](https://boards.straightdope.com/u/Chief_Pedant)\ **Post date:** [September 21, 2008, 7:47pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/35 "2008-09-21T19:47:55Z")
> [@gonzomax](#): > > All we needed was a regulation of the industry. Maintaining lending standards and overseeing the mortgage originators was important. We did nothing. The originators came up with the idea of faking wages and net worth. The borrowers were told by “experts that it is alright” and would work out in the long run. Their crime was wanting a house that was a stretch and trusting mortgage experts. It is difficult to simultaneously “maintain lending standards” and extend mortgages to the less fortunate. And once the standards are made lax to include the unfortunate, it’s difficult to maintain standards for anyone if the risk of writing the paper is separated from the reward of writing it. The lax standards creep out and the reward for writing bad mortgages is not only immediate (as opposed to the delayed penalty when they go bad); those who reap the immediate reward are not those who pay the bad loan penalty. ---
**Author:** ![Clu-Me-In](https://avatars.discourse-cdn.com/v4/letter/c/dfb087/32.png) [@Clu-Me-In](https://boards.straightdope.com/u/Clu-Me-In)\ **Post date:** [September 21, 2008, 8:08pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/36 "2008-09-21T20:08:02Z")
> [@Renob](#): > > It’s pretty undeniable that **_[SIZE=“4”]if the sub prime mortgage meltdown is at the root of this crisis, then the government policies that were enacted to encourage sub prime lending to certain groups of people has a large share of the blame._[/SIZE]** 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 home ownership” in this way. I’m kinda glad you said _ **“if.”** _ Anyway, that aside, do you mind clarifying who the “ **certain groups of people** ” you refer to are? > [@Renob](#): > > 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.** _ Of course you don’t think the financial mess we have now has anything to do with greed and fraudulent lending practices? Ah yes, it has to do with those certain groups of people that do not deserve to get an honest mortgage loan to be part of the so-called American dream of owning a home. Fancy that huh. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [September 21, 2008, 8:56pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/37 "2008-09-21T20:56:17Z")
It was not that long ago. Everybody got bombarded with new packages to lure then into refinancing. I got phone calls and emails offering great cut rate variable mortgages. TV ads from mortgage originators were endless. Home equity loans, use your equity and pay for college. Get an addition. No probs, just sign on the bottom line. No it was not the poor gaming the system. There are 5 million more mortgages due to enter or are in foreclosure right now. We average 60 thousand a month. You are deluding yourself if you believe it was the poor getting in over their heads. Look about you. Foreclosures are in every walk of life and at all financial strata. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [September 21, 2008, 8:59pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/38 "2008-09-21T20:59:42Z")
[http://www.loudoun-county-va-homes.com/blog/category/foreclosure/](http://www.loudoun-county-va-homes.com/blog/category/foreclosure/) Heres a couple. These janitors were doing well weren’t they.? These are foreclosures. ---
**Author:** ![RyJae](https://avatars.discourse-cdn.com/v4/letter/r/9d8465/32.png) [@RyJae](https://boards.straightdope.com/u/RyJae)\ **Post date:** [September 21, 2008, 9:02pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/39 "2008-09-21T21:02:16Z")
> [@gonzomax](#): > > It was not that long ago. Everybody got bombarded with new packages to lure then into refinancing. I got phone calls and emails offering great cut rate variable mortgages. TV ads from mortgage originators were endless. Home equity loans, use your equity and pay for college. Get an addition. No probs, just sign on the bottom line. > No it was not the poor gaming the system. There are 5 million more mortgages due to enter or are in foreclosure right now. We average 60 thousand a month. You are deluding yourself if you believe it was the poor getting in over their heads. Look about you. Foreclosures are in every walk of life and at all financial strata. Argh says the pirate! It’s called a domino effect, loans to those who could not afford them collapsed. That caused the economic crunch that led to downsizing which led to those who at one time could afford the home to no longer be able to afford it. Then you have the housing market trying to correct itself, and you just bought a $600,000 home only to turn and find out a year later it is only worth 450,000. And you owe way more than it is worth so rather than fight to keep the home you sorta let it go. Shit trickles both ways in the economy. ---
**Author:** ![RyJae](https://avatars.discourse-cdn.com/v4/letter/r/9d8465/32.png) [@RyJae](https://boards.straightdope.com/u/RyJae)\ **Post date:** [September 21, 2008, 9:13pm UTC](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189/40 "2008-09-21T21:13:21Z")
> [@gonzomax](#): > > [http://www.loudoun-county-va-homes.com/blog/category/foreclosure/](http://www.loudoun-county-va-homes.com/blog/category/foreclosure/) Heres a couple. These janitors were doing well weren’t they.? These are foreclosures. > **[TheEarlOfRealEstate.com is for sale | HugeDomains](https://www.hugedomains.com/domain_profile.cfm?d=theearlofrealestate.com)** > > Add more credibility to your site - get a premium domain today. Straight-forward shopping experience. Sold for a nice 45K discount. [Previous page](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189.md?page=1) [Next page](https://boards.straightdope.com/t/housing-crisis-started-with-clinton/464189.md?page=3)