Myths/Bill Clinton helped cause the 2008 financial meltdown
It has been argued that Bill Clinton helped cause the 2008 financial meltdown.
The points usually raised are:
- the myth that he helped cause the 2008 mortgage crisis
- his failure in 1998 to push for tighter regulation on the new derivatives market, in the wake of Long-Term Capital Management's failure and subsequent $3.6b bailout (Alan Greenspan and Arthur Levitt advised against action)
- 1999: repeal of Glass-Steagall (or large portions of it), removing the wall between investment and commercial banking
This claim is then used as support for the idea that the crisis was not caused by any actions of George W. Bush or the Republican Party.
- 2009-06-26 Did Clinton cause the banking crisis "We had weakly regulated markets when Clinton took office, but by the time he left, they were an invitation to lawless dealing. For the ease of it, Willie Sutton would have traded his gun and mask for a briefcase and necktie. [..] Clinton created a fertile environment for home-lending charlatans and hiding places for Wall Street swindlers, and upset a regulatory structure that had served the financial marketplace so well for more than six decades."
While it seems entirely likely that Clinton's judgment was in error on these items, it is a bit of a stretch to say that they "caused" a crisis which occurred a decade later -- during which time an incredibly irresponsible and spendthrift president (George W. Bush):
- started two wars (US-Iraq War, US invasion of Afghanistan)...
- ...towards the cost of which he not only failed to increase taxes but actually cut taxes...
- ...and rather than using those tax cuts for those who need them most (lower and middle-class families who would be hardest-hit by any financial downturn), his tax cuts primarily benefited the rich -- the very people who could best afford to pay for a war, and many of whom stood to profit from the war through companies in which they held stock.
To the extent that this claim is being used to deflect blame from Bush or from Republican policies, it is a non-starter at best, and reflective of a Republican tendency toward blatant and unapologetic hypocrisy.
First, it is not reasonable to say that someone's failure to take a specific action is responsible for causing something else to happen -- especially when that person's top advisors (Greenspan and Levitt) advised against taking that action.
Second, this claim (even if arguably true) cannot be used to support a Republican agenda. Republicans fight tooth and nail against government regulation in any form. If it can be shown that they wanted Clinton to take action while the Democrats did not, then that might cast a different light on Clinton's actions, but we would need to catch at least a glimpse of some greater principle at work (i.e. not "a liberal is against it, so we're for it").
Again, this argument cannot be used in support of Republican policies. The overturn of Glass-Steagall was accomplished by the 1999 Financial Services Modernization Act (aka Gramm-Leach-Bliley Act), which had long been a Republican agenda item.