Bill Clinton's Role in Today's Mortgage Crisis

Bill Clinton's Repeal of New Deal Banking Regulations and his Role in Today's Mortgage Crisis

By Ralph Brauer | Progressive Historian | 11/27/2007

Many Democrats wish Bill Clinton still occupied the White House. However, before you put him in Mt. Rushmore, you might want to investigate his role in the mortgage foreclosure crisis...

When Franklin Roosevelt took office, both the President and Congress knew the banking crisis demanded immediate action. The result was one of the crown jewels of the New Deal: the Glass-Steagall Act, officially known as the Banking Act of 1933. Glass made sure the bill forbid banks from getting into the investment business. In addition, the bill established the Federal Deposit Insurance Company, which protects our bank deposits...

Billionaire Sanford I. Weill, who according to Louis Uchitelle made "Citigroup into the most powerful financial institution since the House of Morgan a century ago," has what I call the Wall of Me leading to his office, which he has decorated with tributes to him, including a dozen framed magazine covers. A major trophy is the pen Bill Clinton used to sign the repeal of the Glass-Steagall Act, a move which allowed Weill to create Citigroup. Fittingly, Citigroup is a major contributor to guess which current Democratic Presidential candidate?

When Bill Clinton gave that pen to Sanford Weill, it symbolized the ending of the twentieth century Democratic Party that had created the New Deal. Although the 1999 law did not repeal all of the banking Act of 1933, retaining the FDIC, it did once again allow banks to enter the securities business, becoming what some term "whole banks."

The repeal of one of the most important pieces of legislation in this nation's history came about as a result of another Clinton "triangulation," the wobbling attempt to find the middle of the road that has somehow managed to pass for a philosophy with many Democrats for over two decades. As former Clinton former campaign Richard Morris once described it, you move a little to the left, a little to the right. I'd love to hear Clinton give that explanation to a foreclosed home owner today...

Read the complete article at ProgressiveHistorians.com ...

I forgot that Clinton cause the great depression also.

"When Franklin Roosevelt took office, both the President and Congress knew the banking crisis demanded immediate action. The result was one of the crown jewels of the New Deal: the Glass-Steagall Act, officially known as the Banking Act of 1933. Glass made sure the bill forbid banks from getting into the investment business."

Clinton repealed the Banking Act of 1933. As a *direct* result of Clinton's action, banks made extremely risky investments that led to the mortgage crisis of 2008. This isn't a smarmy joke ("I suppose he caused the Great Depression, too"). It's reality.

Clinton's repeal here was not progressive. Indeed, his repeal of this important and historical legislation was precisely the opposite.

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Rather than shooting the messenger, why don't we stick to the facts? What is your defense of Clinton's decision to repeal The Banking Act of 1933? Do you not think that this was a significant and ultimately detrimental and counterproductive decision on his part?

He did sign the repeal and then the Gramm-Leach-Bliley Act was also signed into law. But you prefer to skip over that? Not all good not all bad. So as usual try a little harder at bringing "facts" into the fray.

Speaking of facts, what's so great about that?

which one of these do you "need" a reply to?
You make it sound like it was repealed AND nothing was put in it's place. You are about half right. yes it allowed big banks and financial institutions become even bigger but it also allowed a company i worked for compete and become very successful. Besides most state banking regs are harder than any federal laws. Try going through a state bank audit and you will know the truth in that.

Speaking of facts, what's so great about that?

:rofl: :rofl: :rofl:

I agree

:hug: :hug:

:hi:


Tell Haruka hi!!!!!!! :hi:

I recognize the long-term damage to the economy that Clinton caused by signing of on destructive GOP laws. Are the only people permitted to have an opinion those who agree with you?

Bill Clinton is not perfect nor were the Clinton years perfect. Not all people, even people in the Democratic Party, agreed with him--even during his administration.

But I have to say that I'm not so sure that history will judge him so kindly.

When it was, I thought that he'd veto it. He didn't. I remember listening with astonishment on the car radio to the announcement that he had signed that bill.

BTW, bank regulation was underway for more than 20 years before Clinton. Was he to blame for that entire trend?

There are regulations of the book for 'safety and soundness'.
The issue is a failure of 'safety and soundness' regulatory compliance.

He's not to blame for the crisis, but in his recklessness to see lots more people owning homes, he failed to make sure that regulation was working to prevent the kind of crap that went on with these subprime mortgages.

Banks were able to purchase risky sub-prime loan instruments thanks to Bill Clinton's repeal of the Banking Act of 1933. This led directly to the multi-billion dollar write-downs that we see today.

n/t

It's as if Bush was never President (don't answer that :rofl: )

This issue - the banking and foreclosure crisis - is one of the most important of the day, so obviously it's important to see how it happened. I don't think calling attention to a point of fact regarding Bill Clinton's record makes me a "disloyal" Democrat - far from it. I want to see a Democrat in the White House next year. Believe me.

Is this a backdoor criticism of Hillary Clinton?

Bill Clinton is actively and enthusiastically involved in Hillary Clinton's campaign, acting as a de facto surrogate in South Carolina. As such, he will most certainly be an active an outspoken player in a Hillary Clinton White House. Hillary Clinton is counting her eight years as first lady as professional "experience." For these reasons, The Clinton administration record deserves to be scrutinized.

I see your angle now :hi:

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How about you?

However long that may be.:evilgrin:

But as long as I stick to the issues, I'm fine! And of course I wish you all the best as well... LOL

when the Savings and Loans, which USED to do the lending, were ruined by the Reagan admin.

As a Democrat, Clinton deregulated both the banking and media industries in ways that have had profound and lasting ramifications.

Repealing Glass-Steagal was a giveaway to the financial services industry, but quite frankly I don't think there was much Clinton could've done to stop it. He didn't have the cojones to prosecute the mergers that had already begun (and given his palls in big business, I don't think he wanted to-- yes, I talking about Robert Rubin, former Treasury Secretary and Citigroup exec.).

Greenspan should also be held accountable, as he kept interest rates artificially low in order to encourage borrowing and discourage saving.

The man who oversaw two economic bubbles still makes $100K a speech sharing his wisdom.