Clinton admits he and his fellow Democrats should've tightened up standards on Fannie Mae and Freddie Mac.
Former president Bill Clinton loves the limelight and he’s come up with philosophical ideas about resolving the “debt impasse”—how Democrats can work with those he calls ideological Republicans refusing to accept tax hikes. ABC hearted Clinton with an article depicting him as a wise statesman.
Clinton’s come a long way—his political rehabilitation is one of the greatest untold stories of all time. Fact is, the US is where we are now largely because of Clinton, his policies and the people he put in charge of our money.
Clinton’s real legacy
The Clinton administration, with help from some left leaning Republicans who were run out of the Party because they were in fact left leaning, derailed financial regulation via politicos like Clinton’s Treasury Secretary Robert Rubin who was followed by Treasury Secretary Larry Summers. Tim Geithner served as under-secretary of the Treasury.
Geithner also later served as president of the NY Federal Reserve, a powerful and secretive entity whose role in the economic meltdown was key.
Book 'Reckless Endangerment' tells unvarnished truth
For a brutally honest look at the disastrous policies of these men who have also served in President Barack Obama's administration, read Reckless Endangerment, the book by New York Times reporter Gretchen Morgenson. Her book will make you want to grab the nearest bucket of tar, rip a feather pillow apart and head to Washington to give these politicos the treatment they’d have received from our ancestors.
Morgenson pegged the NY Fed as secretive.
Clinton’s financial meltdown has been forgotten. Morgenson explains the historic bailout of Long Term Capital Management—a hedge fund—in 1998. Who enabled that? The NY Fed.
Get this. After the bailout, Time magazine ran a cover story titled ‘The Committee to save the world: The inside story of how the three marketers have prevented a global economic meltdown—So far.’ On the cover there was also a photo of three players—Alan Greenspan (served as chair of the Federal Reserve from 1987-2006), Robert Rubin and Larry Summers.
One former Fed official told Morgenson the hedge fund bailout was a “moral hazard moment.”
Morgenson said the bailout was “beyond the pale.” The fund worth $4 billion got in trouble after Russia defaulted on debt the same year.
Clinton, Fannie and Freddie
Clinton was also a primary cheerleader for Fannie Mae and Freddie Mac, the two government sponsored enterprises whose aggression and political ideology (a mortgage in every drawer) lit the path for lunacy lending. If you were breathing, you could get a mortgage.
Taxpayers are now on the hook for billions because of these GSE disasters. Bloomberg said, “Washington-based Fannie Mae and Freddie Mac of McLean, Virginia, have survived on a promise of unlimited U.S. aid and drawn more than $160 billion in Treasury Department funding.”
Even though people like Rep. Barney Frank (D-Mass.) and former Sen. Chris Dodd (D-Conn.) were supposed to be in charge of oversight on matters like Fannie and Freddie and financial regulation, neither man did the jobs. Frank and Dodd approached oversight with a Wild Wild West approach.
Clinton and Glass-Steagal repeal
Clinton was in the Oval Office, by the way, when the Glass-Steagal regulation was repealed. The repeal enabled banks to take more risks. There’s a photo in Morgenson’s book showing Clinton beaming like the cheshire cat over repealing a regulation that would eventually cost taxpayers more than even the predatory lenders and politicians envisioned.
Hopefully Washington will have enough sense to dismiss a former president whose legacy has, like so many other Democrats, been totally rewritten by progressive media and academics. ABC, eager to assist with Clinton’s post-Monica rehab, may be taking Clinton’s remarks seriously, but this Republican knows better.
While blaming Bush, blame Democrats too
When Obama and partisan Rep. Nancy Pelosi (D-Calif.) place all blame for the mess we’re in on President George W. Bush, they are not telling you the truth.
In March, testifying before Congress, Geithner finally told one truth about the meltdown: “For decades, the government supported incentives for housing that distorted the market, created significant moral hazard and ultimately left taxpayers responsible for much of the risk incurred…”
Democrat policy is to create economic bubbles and pass the cost to the US taxpayer. When the bubbles burst, the taxpayer pays again. That bubble ideology sounds a whole lot worse to me than the Republicans’ anti-tax ideology.
(Commentary by Kay B. Day/June 30, 2011)
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