Bill Clinton's drive to increase homeownership went way too far

Hindsight is 20/20. EVERYONE thought home ownership was a good thing. There wasn't a single dissenting voice during the Clinton and W eras. Were you aware any dissent back then?

This is ridiculous. When Clinton was promoting homeownership, real estate values had barely begun to rise. He was long out of office (and oversight) when the crap hit the fan. I bet hardly anyone who purchased a house back in 199whatever has seen their property values drop below what they paid for it. Our trouble exists because of poor national leadership and imprudent real estate investments. LET IT GO, this is yet another Bush disaster.

this simply absurd. president clinton cant be blame on this. it is all bush's fault to weaken the economy. by going to an absurd war when he was advised not to and in top of that he had to basically sell the USA to China loanin money.

What took you so long to figure this out. Clinton and congress were bending over backwards to help African Americans and Hispanics take part in the American dream.
Now that they are defaulting, we the people will have to bail them and the big banks out. We loose twice!

This is another lame excuse for an incompetent republican administration. Did they/you forget "It's the Economy Stupid!"
not an unnecessary war in Iraq.

I see a lot of people calling this ridiculous and blaming the Bush/Republican administration. For you non-economists, war does not effect home values. And for those of you in denial, economic policies take years, generally, to take effect. The policies of the 90s are now having their effects. Just like the Bush Sr/Clinton tax hikes took years to finally slow the economy, and the Reagan tax cuts took years (about 3) to charge up the economy in the 80s.

I DO place much of the blame on the current administration/republican congress for their irresponsible spending practices continuing to set a precedent of irresponsibility for the rest of America. And I blame the Fed for not tightening monetary policy to bolster the falling dollar and encourage savings instead of indiscriminate consumer spending. But part of the blame does lie at the feet of the Clinton administration and that congress for some of the policies that started this housing bubble (it DID start in the late 90s in Arizona). Anybody who doesn't accept that has his/her head in the sand and doesn't understand even basic economics.

P.S. I DID study economics.

There is a single cause for the crisis: banks gave loans to anyone who wanted one, because those loans (and the risk that came with them) would instantly be sold to a third party who did no verification.

Politicians have a lot of problems to answer for, but this isn't among them.

C'mon people. The issues are not just housing related but common sense related. Purchasing as much as possible on credit. Leveraging ourselves with debt beyond the tops of our heads in the name of purchasing houses, cars, things for our children, etc. is the main reason for this. And now we scream over which party is responsible.

Everyone is responsible for this - rich, poor, banks, borrowers, republicans, democrats, majority and minorities. Everything has a cause and an effect and perhaps we all need to learn our lesson and go through a rough patch. We've come as close to repeating the depression (and who knows - maybe we'll still get there) as possible.

But the absolute worst thing would be to elect socialists to the White House. Understand that America may be the best country in the world but that it too has people who MUST suffer on some levels or we should give up capitalist ways and hope that we can find something in our economy that is export worthy rather than just our services.

But if everyone is ok with 70% of what they make going to health care, education, and everything else under the sun - can I please have my mandated 35 hour work week and one month of vacation a year too?

Is there any issue in America that people won't blame on Bush?? The war is all his fault (even though Congress voted FOR it and many other nations joined in from the beginning). The housing market is all his fault (because he personally grabbed people of lesser means by the arm and dragged them in to sign the mortgage papers for a loan they knowingly couldn't handle if the market dipped - after all, we've only been talking about the real estate "bubble" for how long now??). I'm sure global warming, the Israeli-Palestinian issue, Watergate, the buildup of communism, nuclear bombs, and the fact that people expire from old age will be placed squarely on his shoulders as well. If it's a problem, it's Bush's fault! Get a life. Better yet, take some responsibility for your knowingly dangerous and stupid actions. I know it's not the American way, but BLAME YOURSELF!

When one thinks one has heard it all!! then ANOTHER is trying to put the blame on Clinton. What an stupid way to try and cover for the incompetent republican administration. When put into effect, it was a WONDERFUL plan. But as every plan, it must be monitored. For the last 7 years Clinton was not able to monitor it and that is when it derailed, and got out of hand. Who was in charge then?????

I am depressed..keep getting depressed. What have African Americans and Hispanics got to do with this? California and Arizona with the worst markets have these racial make ups- the majority of defaulters are majority...more whites than any other group. Just another example of insensitivity and swashbuck scapegoating

One more reason in a very long list of reason that I have to believe that Clinton was the very worst president that this nation has ever seen... most like will ever see - I hope.

Kudos on the excellent research as well as the lucid and timely analysis.

So the Clinton administration encouraged looser lending standards. Then the Bush administration encouraged still looser lending standards, while directly blocking state action to stop predatory lending practices?

Should they get equal blame?

That's like saying that someone going 80 miles an hour is just as guilty as someone doing 125 while drinking 7&7's...

Instead you say:
'President Bush continued the practices because they dovetailed with his Ownership Society goals, and of course Congress was strongly behind the push. But Clinton and his administration must shoulder some of the blame.'

As though the present administration just continued something the previous one started. Hardly, and shame on you for even implying it.

While we can't say for certain that a Democratic administration wouldn't have let things get so out of hand, we can be confident that they would have at least tried to exercise some regulatory authority.

And Bush is not a Republican. Nothing is Bush or the Republican faults. Blame Clinton and the Democrats for the last seven years. We now need to elect a Republican to office (so the dollar can go to $10 to the 1 Euro, gasoline to $7/gal). A Republican won't spend, spend, spend (trillions of dollars wasted by these idiots) he will cut taxes (for the rich- I won't mention that part), a Republican won't give amnesty to illegals (like their Republican god- Ronald Reagan did in the '80's- race baiter)- Solution: tax the rich and corporation on their networth not their profit (they never make a profit). Let's give the rich and corporations their flat tax (10%). Tax them 10% of their networth every year.

I would be as happy to blame Bush as the next guy (though definitely NOT Clinton), but neither of them caused this. There is a major problem with our banking system and the U.S. govt. has always protected the banks. They should offer everyone a one-time chance to refinance at a fixed low rate (4-5%). What good is $600 when people are losing their homes?

So vicious and ignorant comment ! This is a financial issue, not a political one. The banks saw an incredible opportunity to make money with mortgages while transfering the risk to fancy structured product buyers. Greed is the motive, not political clout.

Sounds like an article from fat,drug addicted, hypocrite Rush Limbaugh.

Can't beleive that guy still has a job. As long as people hate Bill Clinton, Rush L. will have a job.

Peter Coy,

I used to have respect for your column. Where do I start.. Oh yeah, you place no blame on the current administration who had oversight responsibilities wit hrespect to the banks and lenders. When the first abuses were reported nothing was done about it and so the fallout has become the debacle we see today. Laissez-faire was the recent name of the game.

Well now looks like the guy who wrote this is long on wind and short on memory and foresight, which means he's most likely a BMW driver. Clinton balanced the budget, got this country motivated after an actor told this country to go to hell and enjoy the trip and you know alot of them did. The reality is that predetors who are in the biz of loaning money are the new and now bleeding out used car salesman of old. Another fact is, you all are not rich so let's get real here, the oil industry knows we are running out of oil, fact, deal with it. This is enough to cause alot of what we are seeing also. The snow has fallen the seed fell from the pine and the ball is getting bigger. The only question now is how big is the hill, and do the American people of whom few are Patriots have the cajones to finally slam their foot up the overfed arse's of these politicians and corporations and say enough is enough, we want to have a little respect here...

I do believe that this problem has many fingerprints, from Wall street who peddled the over rated paper and over rated the Lenders, to the Lenders who kept lowering their guidlines to get their part of the marketshare, Investors, Mortgage Brokers, Loan officers and of course the borrowers all have ownership. But Yes the Executive, Legislative and many Govt. agencies promoted and allowed these lending policies which would be wildly successful as long as the housing market was going up. It is not about Replubican or Dems all parties are involved and remember,always follow the $$

We should have kept you a telecommunications editor. Your demotion is in your inbox.
-Mgmt

Your column and those who don't want to admit the obvious reason is why this country is going downhill. Let's blame someone else for the problem.

In this case, the blame squarely falls on the greedy banks who irresponsiblely lowered the loan standard, and the home buyers who wanted to get loan they couldn't afford. They both deserve what they got. The rest of us pay for along the way.

All things seek equilibrium..
Clinton & the Democratic left started this PC stuff. The Republican GW only finished what they started. We all knew in our hearts that giving people who did not value property a free ride would back-fire. Well why are we suprised now??
This country consists mostly of law-abiding, mortagage paying, family oriented citizens!! We Now have the 1st problem created by Socialist idealogy.. and we are suprised by the results??
Give me a break.. anybody who knows even a little about the history of socialism/communism.. will not be suprised about the results of giving stuff away to people who didn't earn it.
The people who did not earn it.. only come to expect more "Free" stuff..and the people who actually earned it through work and thrift only resent the takers more and more.. The people who want to take more than our charitable instincts tell us to give will eventually be playing with FIRE!.. We as
taxpayers and citizens will eventually.. say "NO MORE" !! jmo.. frank

I am no big fan of the Clintons, but there is PLENTY of blame to spread around. George W. Bush, Alan Greenspan, Ben Bernanke, HUD, Fannie Mae, Freddie Mac, Mozillo, most mortgage brokers, most banks, Wall St. ALL deserve a large piece of humble pie for this mess.

Let's just hope that any or all of them, or someone else can soon be honored for getting us out of this in a rational manner that does not cause an even greater bubble.

A news article I read in the San Francisco Chronicle in mid-1974 before Greenspan was Chairman of the Council of Economic Advisers.

A Germany Banker who was retiring, commented on the insanity of Allen Greenspan's position on housing, that people could use the homes they lived in as one more investment asset to draw credit and investment fund on. The Banker was appalled that Greenspan would suggest letting people venture their family homes.

That information on Greenspan stayed with me as the housing market was allowed to inflate to bail out a faltering tech bust. It was an old trick he had all of the time and it worked. Its important because Greenspan had that card up his sleeve for 30 years before giving it support with extreme low interest loans from the Fed.

One other issue that started in the 1990's was Fair Lending. The Clinton admin. was all over lenders to provide money to minorities and if the Feds. suspected lenders of ANY racial inequalities the lenders were going to be hit with fines/lawsuits etc. Lenders then opened the floodgates for minority lending and were forced to lower their lending standards.

Loans were made to borrowers who would never have qualified pre-1990's. Default rates were low because values continued to rise in the 1990's into 2005 and these borrowers were able to refi again or even sell to prevent any foreclosures.

But once values stopped rising the game was over. Now we're back to strict lending.

I agree that the comment may have been vicious, but I don’t agree that it was ignorant. This was a financial issue until the republascums turned it into a political issue by relaxing the regulations on the banks. As proof of what I say read this news article:

The fact that lib-tards blame Bush for sorry mortgage lenders is pathetic. Here is the problem.

I make low six figures. I lived in Irvine CA. A mortage lender wanted to put me in a $750,000 house with a principal only loan. He could have done it. This loan is rediculous, irresponsible and STUPID...yet, 1.5million will default this year in similar arrangments, just like it. This has ZERO to do with Bush. I will not blame Clinton to much, except he did push for easy ways to get people into home ownership. Republicans did not object, because libs would have complained they were being bad to the poor.

Mortage lenders and bank officials who took these loans need to prosecuted, fined and with jail time.

Wow what a lot of views. I only wish that more of the country was even half as informed as the bloggers in this column.
A few facts; As part of the HUD program during the Carter admin, the idea that minorities were as a percentage, less likely to own a home was cause for dismay. The administration leaned on congress and the banking industry to come up with a solution. The solution was variable rate loans. Here is where the initial seeds were planted. Throughout the years other exotic instruments were created like I-O loans and teasers. Wall St. sold these to foreign investors (thank God) and laid off a huge portion of the risk.

No matter how benevolent their intent, the ideas of the do gooder Democrat almost always end up backfiring. Johnson had already created Fanny Mae (1968) and the Nixon administration further introduced Freddie Mac (1970). These government institutions sole responsibility was to insure that these types of things do not happen. Why are they not called into congressional hearings for questioning? Over 10,000 government employees between them and they rubber stamped everything. This is where the real shame lies. They should have stopped this long ago, they had the congressional power to do act and they did not do so. The presidential policies of Bush and Clinton with regards to housing are irrelevant when congress has given the authority to enforce policy via another institution such as Fanny and Freddie.

Let me see if I get this straight. Government twisted arms on the banks to give more loans on houses regardless of creditworthiness, but the banks should be stuck because of this? Sounds to me like jail time should be given, but to Government people for their strong-arm tactics and not to the banks.

The Government did this same thing in the 1960's to the automobile industry, twisting their arms to hire non-qualified people to build cars. Anybody who drove a 1964-1972 car can testify to the terrible effect on quality this had. The automobile industry has never recovered.

wait till hilary messes up the rest of our economy

Did any of you "economists" consider the widespread deregulation of thrift orgs and banks concordant with the loosening of oversight as the Bush people totally neutered all such agencies as would have policed the practices of both lenders and the Fed agencies??

This is another example of how Republicans turn a good economic policy into a lousy one through sheer greed.

"Hello...I'm from the government...I'm here to help."

YIKES!!!

Another "blame Clinton" for Bush's continuation of his policies.

"Illegal immigration is policy"

"Home loans to illegal aleins is policy"

"Liar loans are policy"

Its not a "minority thing" minorities have provable income, and ID, Ninja loans (no ID no doc, no verification) are targeted at (and still are) illegal aliens, nobody else.

Maurice nailed it. ex-Senator Graham, now banking lobbyist, got the oversight totally neutered. These banks willing dove into risk, and then lied about how bad it was. Bank executives get paid huge bonuses regardless of performance. Now our 'American' banks are being bought up at discount rates by foreign companies (i.e., CitiBank). And those risky lenders and lobbyists never get financially hurt from these things. They cash out early, and regular families get hurt. I purchased my home 10 years ago, my property value goes up in the boom which caused my taxes and insurance to skyrocket, and the value of my home goes down slightly, but my taxes and insurance still went up again. I was no player in the housing market, but I'm paying for it..... like millions of other innocent people (excluding bankers and lobbyists).

GEORGE W. BUSH WILL GET THE NOBEL PRIZE IN CHEMESTRY FOR 2009!!!
REASON : HE CHANGED THE CHEMESTRY OF THE DOLLAR BILL TO SHI.......!

Maria Kantor

Chemestry is spelled CHEMISTRY.

Bill Clinton 1996 On The Issues

Expanding Affordable Housing

"Over the past few years, I have emphasized three basic ideas—community, opportunity and responsibility—that I believe are at the heart of a more dynamic and prosperous America. The priorities of the Department of Housing and Urban Development, from making sure that hardworking Americans realize the dream of home ownership, to addressing the tragedy of homelessness, are outstanding examples of how our government can empower people and institutions.”
—President Bill Clinton

President Clinton recognizes that Americans’ homes are central to their lives. He is working to increase housing opportunities for all Americans, make homes and communities safer and more secure, and reinvent the Department of Housing and Urban Development (HUD) to meet America’s housing and community development needs. The Clinton Administration is implementing the most far-reaching changes in public housing in decades—demolishing the worst housing developments, cracking down on bad management, rewarding residents who work, and combatting crime.
He is transforming public housing by:

Helping increase the nation’s home ownership rate to its highest level in 15 years.

Entering into an unprecedented partnership with more than 50 key public- and private-sector organizations to form a National Home Ownership Strategy. Coupled with a stable economy and low interest rates, this initiative is working to help 8 million more families become homeowners by the year 2000.

Revamping the Federal Housing Authority (FHA) to meet the needs of today’s consumers—through streamlining and consolidating services and automating functions using the latest technologies. FHA is also providing home purchase loans for low-income and minority home buyers at more than twice the rate of conventional home purchase loan insurers.

Working to reduce barriers to home ownership caused by unlawful discrimination. To date, HUD has signed 70 “Best Practices” agreements with key lenders that are resulting in more fair lending practices and expanded opportunities for low-income and minority families.

Fulfilling his promise to permanently extend the Low-Income Housing Tax Credit, spurring the private development of low-income housing and helping to build more than 120,000 homes each year.

Launching an innovative public-private partnership initiative to encourage pension funds to invest in the production and rehabilitation of affordable multi-family housing. These partnerships will create 3,500 units of affordable housing for working families and the elderly.

Improving the HOME Program to increase significantly housing and rental assistance to families. In fiscal years 1994 and 1995, the Administration provided approximately 127,000 families with housing assistance through the HOME program and over 19,000 families with HOME tenant-based rental assistance.

Continuing to expand rental assistance for a record number of renter households who struggle to pay over 50% of their very low incomes toward rent and utilities. This assistance is critical for states and localities in helping families make the transition from welfare to work.

Strengthening and extending the Home Equity Conversion Mortgage, which allows seniors to use the equity in their homes to meet financial needs without having to sell their homes.

Tearing down 30,000 units of the worst public housing and replacing them with townhome-style developments to help renew our neighborhoods. HUD has awarded $1.44 billion in grants to spur economic development and change the shape of 85 public-housing developments nationwide.

Cracking down on bad management in public housing by taking over the most troubled public-housing authorities and forming innovative partnerships with local and state officials.

Changing admission rules and rent calculations to reward working families and increase opportunity and responsibility. The Administration is helping to make public housing a springboard to further opportunities and a safe place to live through:

Campus for Learners initiative to transform public-housing developments into centers for living and learning.

Aggressive implementation of the “One-Strike-and-You’re-Out” policy that helps prevent drug dealers and violent offenders from terrorizing public-housing residents.

Operation Safe Home, under which federal law enforcement agencies are working with local police and public housing residents and managers to increase the arrest and conviction of violent and drug-related suspects. This initiative has resulted in the arrest of thousands of criminals and the confiscation of hundreds of assault weapons—and $3 million worth of drugs.


Proposing a restructuring of HUD to respond to local needs to help people improve their own lives. This would consolidate HUD’s 60 programs into three flexible performance-based funds, giving mayors and governors the flexibility to develop housing and community investment strategies, continue the transformation of public housing, provide portable vouchers to residents of the worst developments, and turn HUD into a “community-first” agency by relocating and empowering local personnel.

Making homeless assistance a top priority and doubling funding since 1993. In 1995 HUD awarded $900 million to over 800 transitional and permanent housing programs nationwide to help homeless individuals and families move from the streets to permanent housing. As a result of these efforts, HUD’s homeless programs are serving 300,000 individuals, a 14-fold increase since 1993.

Both Bush's administration and Clinton administration gave banks guidance to provide loans. The investment banks incorrectly evaluated the value of these ARM's in the form of securities which investment banks in turn leveraged. Banks offered loans to individuals who were not qualified.

This the reason for this fiasco which is multidimentional and cannot be blamed on any one administration. Investiment banks leverage assets to make money but the agencies which gave these mortgage assets the wrong credit rating. Greed and too many free loans have led to this fiasco.

If you honestly believe this financial crisis is due to George W. Bush or CEO's at banking institutions, then you are as brain-dead as they come. Take a history lesson and look at the Congrssional Federal Regulation changes under Carter and Clinton and you will find that Banking Redlines were driven into low income areas by the federal govermant looking to expand home ownership. Fannie and Freddie were simply there to guarantee the high risk debt and both have been funneling money to the pathetic likes of Barney Frank for years. Both Fannie and Freddie have been nothing but slush funds for the left's social agenda. The current Bush administration asked twice for increased capitalization and oversight regarding these two over-leveraged companies, but were blocked by Barney Frank, Chuxk Schummer, and the Democrats. The same lying bunch that are now claiming they want to control the salaries of Banking and finance CEO's after driving them to make the high risk loans to begin with. Keep drinking the kool-aid folks and the hard working tax payers will keep bailing you all out.

Oh and this isn't a race issue it is class/income issue. The fed should never have gotten involved in the mortgage business because history has taught us that socialism just does not work!

I can't believe you Democrats ever watch the news or read a newspaper! Bush was never in Congress. It is Congress that regulates the banks, both the Senate Banking Committee (headed by Democrat Chris Dodd) and the House Banking Committee (headed by Democrat Barney Frank).

Bush tried at least a dozen times, well documented, to get Congress to fix the problems with Fannie and Freddie. John McCain co-sponsored a bill in 2005 and pled with the Senate to regulate them, but they refused to even vote on it. Of course, just follow the money, and see that the biggest money recipients from Lehman, Fannie and Freddie were Chris Dodd, Barack Obama, Hillary Clinton, and John Kerry.

This is a Democrat debacle all the way!

Amazing how some blogs such as "The Big Picture " think that this legislation had no such effect on the Housing Bubble

Must be blinded by politics I guess

If W walked on top of the water of the Potomac river today, tomorrow's liberal press would headline "Bush can't swim".

There is a lot of blame to go around. But the obvious first cause is "greed".

There are millions of Americans who are able to comprehend contracts they sign.
Even is the "Fair Disclosure" laws they still are unable to comprehend.

I have two stories to relate. The first involves a single parent with poor credit history but has equity in her home. When mortgage rates were being written for 5% or less she refinances a 12% fixed rate loan. They gave her 7-3/4% for 3 years. I had asked her the terms as year 3 was coming to a close.
She had no clue. She evenually brought the contract to me to read.
LIBOR plus 5 points, 2 point max change with 2 adjustment periods per year.
from 7-3/4% to 13-3/4% within 13 months.

Another story I have less information, related to me by an employee of WaMu who had talked to the woman, for other than the loan was LIBOR plus 10 points. The husband was illegal and his income could not be included in ability to repay.

The first case was 14 months ago and I encouraged her to re-fi. She now has 6-1/2% fixed.

The second case probably has lost the house.

If, as part of this bill there is a provision to reduce interest rates to a level around 6-1/2 to 7% fixed and the parties can pay at that level I would not be unhappy. But if they default, then continue the original foreclosure proceeding with a sale. Reducing principal, no way. All we need is to encourage others to go a foreclosure route to reduce their principals too.

After reading all of the responses to this blog, I have to say that I am amazed. There is enough blame to go around and everyone can blame anyone for the crisis if thier opinions are so swayed. Everyone's opinions is not what amazed me though. Only one of the Democratic/Clinton supporting responses actually had facts backing it up. Bill5321. Good job on being informed. Obviously, opinions are just that, opinions, and don't have to be supported by facts, but if you are going to passionately support that opinion, be able to back it up.

This is so messed up and we are about to embark on a disaterous endeavour where the Dems can worsen the situation even more. If we tax our largest companies the CEO's will take home no less, the economy will shrink and joe American will just pay more or loose his job. Wake up people and realize that putting low income people into houses they could not afford was the biggest mistake of the 20th century. You cannot argue the fact that Bush and McCain tried to regulate fannie and freddie over 2 years ago and were shot down by the DEMOCRATIC congress. How come no one reads??? Oh and dare I bring Iraq into this...wait till November of next year when Obama takes credit for the turnaround as well. Whatever, with the dems raising taxes and the fallout from their horrible lending policies finally playing out, Chris Farley comes to mind. we will all be living in a van down by the river ...

so this is all the fault of Bush Sr / Clinton policies now taking effect??? that means it takes 15 years or so for things to kick in? you are telling me the high times of the 90s is due to Jimmy Carter? interesting...

as far as all this garbage...Clinton and Bush promoted home ownership - Bush far more recklessly than Clinton (zero down payment initiatives, etc - I believe Clinton matched funds, but owners still had skin in the game)...plus the lending completely deteriorated under Bush's watch and no one stepped in to do anything.

that said, I understand Clinton dropped Fannie and Freddie reserve requirements so thats a huge factor in their downfall..

It all comes down to giving people loans who can't afford them! Where in the Constitution does it say everyone should be able to own a house? Everyone should have the equal opportunity, but that is a different thing. Lowering the regulations for loans just ended up giving a bunch of people who couldn't afford homes loans that they couldn't pay for. Not everyone can go to college and become doctors, lawyers, and businessmen and not everyone can own a house!! Thanks Democrats for again giving money out willy-nilly.

"You are a den of vipers and thieves. I intend to rout you out, and by the Eternal God, I will rout you out... If people only understood the rank injustice of the money and banking system, there would be a revolution by morning."

Andrew Jackson

BAILING OUT THE CROOKS ON WALL STREET WITH TAXPAYERS MONEY IS NOTHING MORE THAN COMMUNISM! I DON'T THINK THE AMERICAN PEOPLE WILL WAIT FOR MORNING IF THE THIEVES IN D.C. CONTINUE WITH THEIR CORRUPT SOCIALIST AGENDAS!

Reagan once said, "The government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it"

I think that pretty much sums up the Democratic Theory of Economics that just doesn't work.

Having said that, I dont believe either administration is at fault for the bubble that just bursted. Perhaps both parties could have done a little more to prevent such a disaster but I agree with Micheal on this..

the blame goes to the banks who gave loans to anyone then sold them to a third parties who did no verification.

This is truly where the blame lies. Right on Michael.

Coy wrote the truth. Clinton supporters don't like it, but why argue? Posters: John C and Chris, thanks for stating the facts, without the overblown emotional hate.

From May 25 @006:
http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190

From Sept. 11 2003
http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=1

How unwilling to see truth.

The Clinton Administration definitely carries part of the blame for this disaster. By pushing for home ownership for people who truly could not afford homes.

It worked great when interest rates were low and everybody was buying houses with ARM's that were next to free. But when the interest rates increased (as they always will over time), the party was over.

Something else people ALWAYS seem to forget is that while Clinton did leave office with a relatively good economy, Bush had just started his presidency when 9/11 happened. This as a HUGE impact to our country and our economy. Multiple statistics from all sides of the partisan parties agree that the impact was as high as $500B+ over the 1st term.

People also forget we were ALL (80%+ approval ratings at the time) willing to go to war and hunt down the terrorist.

Now it seems noone will stand up and say they were for the war.

Like everything else in society nobody wants to take accountability.

when my husband and i started looking at homes - we could totally afford the home no problem. it was the PROPERTY TAXES that made home ownership so unreachable. a year later we were in a better financial situation and were able to buy. now we get to pay property taxes - most of which goes to the local school district that we will not use as we hope to send our children to Catholic school. i guess with the bailout having passes lower taxes are a thing of the past.

The common element to be blamed, is socialism.

If finance companies were able to package off and sell subprime mortgages which were not verified by the purchasers of such mortgages, it is because there exists no satisfactory monitor (of the ilk of the American Arbitration Association in its own domain) in the free market of finance. The reason there exists no satisfactory monitor in the free market of finance, is because the free market of finance is not really free, but hampered by intrusive government red tape which pushes out any potential private monitor by way of lack of incentive to get in to the action.

Markets do not arbitrarily fail: they fail because someone has interfered with them. The idea that markets can arbitrarily fail, is philosophically silly, as it inductively implies that the market only came into being by a fluke in the first place. For a failed market is a non-existent market, and if a market which exists can arbitrarily become a non-existent market, there is no reason why it should exist in the first place.

Certain small areas (eg individual companies) of markets fail owing to poor management. But you don't get thousands failing at once for any reason other than the interference of government. Socialism.

The opening thread is correct: Clinton's ideas were contrary to the stuff of the free market, and therefore form part of the reason for the problem.

To the extent that Bush continued on with the same socialism (if he did), or further messed with the market mechanism via his own ideas (if he did), he is to be blamed.

So all respondents above are wrongly focussed on WHO did what, rather than the fundamental cause, which is socialist policy.

Because the bailout plan is also an instance of socialism, it will simply worsen the situation. You can't solve socialism, with socialism.

So the fundamental problem with Americans and the free world, is that they don't understand what freedom is, and their ideas on why economic problems exist, reveal that they think that the relative wealth of Americans over citizens of the former USSR, is for reasons unexplainable and arbitrary.

It is natural for nations who have acquired wealth via the work of their forefathers under a free market, to eventually loose understanding of such, and to spiral down into socialism. This is now occurring in the entire Western World, to which the lack of fundamental understanding exhibited by most of the above respondents, attests.

Socialism is coming, is here, and will continue to increase at exponential rates. No doubt about it.

I hope you don't mind I posted a sample of this on my personal MySpace page and linked it back to here for the rest of the story. As to not take credit for it.
http://blog.myspace.com/index.cfm?fuseaction=blog&pop=1&indicate=1

Blame whom ever You want. As a retired banker & republican our main difficult is that any country can not have on going wars & a strong ecconomy. The stupid actions of Bush & Cheney in going into these warns is the cause for the problems of today, tommorrow, next year & future years.

I have sat here and tried to read most of these comments..ha funny how most want to blame Bush for everything that is wrong with america! Give me a break...do your homework and read some history..Clinton did sign the CRA and this did enable people who should of never owned a house to be able to buy one. On top of that if you only make X amount of dollars and you purchase a home that you cannot afford then it's your own fault when you cant pay!!!! When I bought my home we qualified for alot more than the house we picked out. Whey didnt we take the nicer more expensive house? Basic economics here...we make a certain amount and to have any extra's we have to have a mortage payment that we can live with. On top of everything else,a person would have to be totally stupid to take a variable rate instead of a fixed one!
Im so tired of people blaming this adminn. for all the bad things going on. Past presidnets have helped, banks have helped by not standing up and fighting the CRA from clinton years, etc. Its time for the american people who signed for sub prime loans etc to take credit for their lack of information!
I would rather pay for a war that billions are spent on, than to bail out a person who bought a house they could not afford!
President Bush has done the best job he could do, given the fact that early in his presidency we had a major terrorist attack, that by any account most have forgotten how terriable that day was. However I live it ever day while my husband is gone fighting a war that people in america say they are losing (thanks for the support thier OBama)when in fact we are winning! Sorry our guys couldnt end it in the time frame that you civilians think it should be done. So why dont you all stop critizing and start coming up with solutions and send them on to your congresmen!

All have to shoulder a share of the blame, but all you total Bush bashers should watch this clip to the end.

http://clipmarks.com/clipmark/0604BA42-C777-4C2B-A919-B1AC6F7A9F2A/

Oh my...is that Barney Franks, who recently received extreme plaudits
from Nancy Pelosi for his work on the
bailout (pardon me...rescue)

I have been in banking for 15+ years, originally with JPMorgan Chase now with another, I care not to say. Banking has been my life. To For Mr Ridiculous My Foot you said "...as far as all this garbage...Clinton and Bush promoted home ownership - Bush far more recklessly than Clinton (zero down payment initiatives, etc - I believe Clinton matched funds, but owners still had skin in the game)...plus the lending completely deteriorated under Bush's watch and no one stepped in to do anything." I really hate to burst your bubble, but it was Mr Clinton that introduced the no down payment loans as wells as stated income loans where you don't have to prove how much you make just sign a piece of paper that says you make that much. Sorry, but I and many, many others have seen this unravelling since 1993 theat's when I started in the field. We told our bosses then that these loans were a bad idea, it was all about market share, well, yes they had market share, they now have market share of the garbage. This mess start and rolled under Clinton, bush tried to stop it in 2003, with regulations to reign in Fannie Mae and Freddie Mac, but the Democrats stopped it. It's your bed America, thank the Democrats for making it.

Please check your facts before posting! Clinton, bypassing Republicans, enlisted Andrew Cuomo, then Secretary of Housing and Urban Developement, allowing Freddie and Fannie Mac to get into the sub-prime market in a BIG way. Led by Rep. Barney Frank and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks. Since they could borrow at lower rates than banks their enterprises boomed.

With incentives in place, banks poured billions in loans into poor communities, often "no doc", "no income", requiring no money down and no verification of income. Worse still was the cronyism: Fannie and Freddie became home to out-of work-politicians, mostly Clinton Democrats. 384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying and political activities. During the 1990's Fannie and Freddie enjoyed a subsidy of as musch as $182 Billion, most of it going to principals and shareholders, not poor borrowers as claimed.

Did it work? Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority homeownership rates are shrinking fast.
No one is to blame but our representatives in D.C. who, for the most part, we put there in the first place!
Unfortunately we must trust the same idiots who got everyone into this mess to get us out!

are you guys serious? I agree that politicians are to blame, and all this does is prove to me that the President of the U.S.A. is a scapegoat.

The entire ADMINISTRATION is to blame.

What is amazing to me is the fact that two resonable people can read a block facts and walk away with two totally different opinions. Fact: Clinton started the econominc downturn in the economy set up Fannie and Freddie as "jobs program" for his party. Fact: Bush was a little too busy focusing on a war accross the pond and did not monitor this failing program.

Read my lips "IT IS EVERYONES FAULT". If you have a credit card, a second mortage or have used a home equity loan to go on vacation.

Repbulicans are for business and Democrats are for the people. Business was good and people were being take care of so what needed monitoring? Maybe the people who milked the system took the equity out of the homes they bought and then walked away from the mortage with that equity. We, the people are to blame for this mess. We put the politicians in office and we are not pissed off enough to change things for the better.

"Our trouble exists because of poor national leadership and imprudent real estate investments. LET IT GO, this is yet another Bush disaster."

So people that make laws are not to blame when those laws bite us in the butt, however, people that come in later and don't completely change those laws should be skewered? Doesn't that seem a tad bit inconsistent?

Also please stop with the "poor national leadership" BS cop out phrases. Government officials use/show their leadership in the bills they made. The bills that caused this were made/called for by Clinton and the early 90's Senate, so how does that show poor national leadership by Bush? That doesn't even come close to making sense.

I agree with the "hind-sight is 20/20 crowd" but find absolutely fascinating those that blame Bush for bills, positions and stances brought about before he became President.

Let the Government do it's job and no more. Uphold contracts, protect individual rights and protect us from outside invaders. That's it.

But a lot of us just want to get ours. So we agree to more and more help.
Well I guess we're getting what we deserve.

First off, it amuses me that the pro-Clinton comments are written in such poor english. And these people are going to understand even basic ecinomics. Yeah right, this is why the voting process in America needs to be screened, so only people that are well versed in current events earn the right to vote.

Hey Everyone. Philsgang.com has been around for years. He has been predicting the markets and screaming for a long time that we were not being told the truth. Phil said the big problem started in 1999 when Clinton made non-liquid asset mortgages liquid. Then they were able to be sold off as securities. When they were able to be sold off, that is when banks etc. didn't care if people could pay back because they could be sold. Barney Franks, Senator Dodd and chuck Schumer of the powerful finance committee were suppose to be over seeing Fannie and Freddie. They were warned by Secretary Tresury Snow, Greenspan etc. that problems were brewing. Phil played back tapes of all of it and Franks and company were all saying there was nothing wrong with Fannie and Freddie. He also said these characters were getting paid hundreds of thousands of dollars for speaking engagements from Fannie. He is forming a petition to impeach Barney Franks on philsgang.com. Don't believe this "last eight years of the Bush era" routine, there were several of them in on it and stuffing there pockets when they knew the average american was ready to lose their shirts.

Osama 08! yea ya

I don't understand why the former CEO's of Fannie Mae, Franklin Raines and James Johnson, aren't being prosecuted for what appears to be over 10 billion dollars in "accounting irregularities", more commonly referred to as cooking the books, which on top of covering up the financial distress of Fannie Mae at an earlier point where the enormity of the crises may have been mitigated, it also allowed them to reap millions in bonuses. Perhaps it is because they are prominent democrats and this would be bad business for the party during an election year, especially considering fixing the economy is Obama's calling card to the middle class. The socialist leaning democrats do need to wake up and smell the roses instead of continuing to drink the "its Bush's fault" kool-aid that is being passed around by the media and their party.

If I am not mistaken but the current Congress that started in 1996 - current is controlled by a majority of Democrats. The agrument of blamming the current administration (yes there were a ton of mistake by Bush) but Congress let a lot of things pass that shouldn't have. And the last 2 years it has been controlled by the Dems. Not GOP. So alot of this mess has to be blamed on them.

I can not believe there are so many stupid people in the world. Clinton was perfect , huh tells the world alot about you! Bush tryed hard to straighten out Clintons 8 yrs of hell. Clinton had no idea what he was doing and everyone praised him for it. This is what a collage education does for a person!

Isn't it ironic that when the real estate market was blooming everybody (including those who could not afford a house)was happy w/Bush even when we were spending millions on the war. But when the real estate market burst (as was predicted years prior)resulting in an economic disaster then all of a sudden everybody wanted to go after Bush and the fact that he got us into war (no credit was given to all those in Congress who voted for it). It's all about a society that is selfish, spoiled and has the "me first" attitude. When everything is hunkie dorie no one complains but when the ax falls the President is to blame. Matters not that Clinton was responsible for forcing banks to lend to borrowers who could not afford a house.

Isn't it ironic that when the real estate market was blooming everybody (including those who could not afford a house)was happy w/Bush even when we were spending millions on the war. But when the real estate market burst (as was predicted years prior)resulting in an economic disaster then all of a sudden everybody wanted to go after Bush and the fact that he got us into war (no credit was given to all those in Congress who voted for it). It's all about a society that is selfish, spoiled and has the "me first" attitude. When everything is hunkie dorie no one complains but when the ax falls the President is to blame. Matters not that Clinton was responsible for forcing banks to lend to borrowers who could not afford a house.

Ben and all of you other PRO-Bush idiots should be more concerned about not only the trashed economy that can be contributed to bush's last 8 years but the increased national deficit that could have payed for and fixed SSI but also the failing infrastructure that he has ignored etc. Face it - Bush will go down as the worst president in history. He spent and waisted not only his "political capital" but the nation's resources, making the only people better off after his 8 years as president being the oil men (his family, VP, and foreigners). Bush was never the President of the US but more the President for corporate oil (After all Global warming caused by people still does not exist). To think I voted for this man the first time is embarrassing enough but to think there are still people out there who think he did anything but ruin and sell out our country is pathetic. DON'T BLAME CLINTON FOR BUSHES SHORT COMINGS AND STUPIDITY!! After all he had plenty of time to reverse any bill Clinton passed like the so important one that banned the sale of Automatic.