HuffPo shocker! Bill Clinton Was Not an Economic Savior

It drives me so nuts when people claim Clinton was good for the economy. He was single handily responsible for the housing crash! I guess most people only know what they see in the mass media and we know the media is in no hurry to report negative news of their other messiah.

www.huffingtonpost.com...

“The Clinton economy was driven by a stock bubble,” he wrote. “This is not a debatable point. The ratio of market-wide stock prices to corporate earnings was well over 30 to 1 at the peak of the bubble in 2000. This is more than twice the historic average.”

The other way that the bubble drove the economy is through the wealth effect on consumption. The run-up in stock prices generated roughly $10 trillion in bubble wealth. The wealth effect from stock is usually estimated to be 3-4 cents on the dollar. This would mean that the bubble generated between $300 billion to $400 billion annually in additional consumption. This would have been 3-4 percent of GDP at the time ($480 billion to $560 billion annually in today's economy). This is born out in the Commerce Department's data which show that the saving rate fell from close to 7 percent at the start of the 1990s to around 2.0 percent at the peak of the bubble in 2000.

This was the economy that President Clinton handed to President Bush in January of 2001. It was an economy that was being carried by an unsustainable bubble that, in fact, already was in the process of deflating at the time Bush took office. The S&P 500 was more than 10 percent below its 2000 peak and the NASDAQ was down by more than 40 percent on the day that Bush took office. This pretty much guaranteed the recession that began in March of 2001 just as the collapse of the housing bubble placed President Obama in the middle of terrible recession in January of 2009.

I've been saying it for years, much to the chagrin our of resident Democrats and foreign Democrat role players.

reply to post by PvtHudson

He was single handily responsible for the housing crash!

I gotta stop ya there.
That is untrue.
If you look at the events that led up to the crash. Clinton wasn't the one with sole responsibility for the crash.
It was the people who voted for repealing Glass–Steagall Act, which btw was a republican senator Leach from IA.
Of course we never learn from history so many of the same mistakes that happened in the 30's happened again.

Originally posted by grey580
reply to post by PvtHudson

 

He was single handily responsible for the housing crash!

I gotta stop ya there.
That is untrue.
If you look at the events that led up to the crash. Clinton wasn't the one with sole responsibility for the crash.
It was the people who voted for repealing Glass–Steagall Act, which btw was a republican senator Leach from IA.
Of course we never learn from history so many of the same mistakes that happened in the 30's happened again.

Was giving out loans to people who couldn't afford them so everyone "could own a home" a major Clinton policy or not?

oh yah!
the economy used to be good!
oh, i forgot about that.
i used to make ,uhh, money i think it was called.
there was like lots of ,ummm, work too.

thanks for the uplifting thread, guy!
hey! maybe we should elect clinton some more!

Originally posted by tinhattribunal
oh yah!
the economy used to be good!
oh, i forgot about that.
i used to make ,uhh, money i think it was called.
there was like lots of ,ummm, work too.

thanks for the uplifting thread, guy!
hey! maybe we should elect clinton some more!

You didn't read the article, did you? It was a house of card Bill created. Obama inherited Bill's economy, not Bush's.

Ahh.. Hudson.. You hit the most touchy topic of our modern times for evaluating recent leadership. .....and I'm shocked Huffpo comes out against a man they've been unable to sign enough praise for in past years. Hillary must be moving against Obama or they see the possibility of it. Time for some pre-emptive strikes across the Clinton 'brand' as a whole and the two of them in particular. Ugh...... Bad form for any journalism and they're usually better than this with their OWN side, at least.

Clinton WAS one of the best President's we've had in living memory for economics. Now, I DID NOT BELIEVE THAT myself until I built the President's thread linked in my signature. I STILL think Bill Clinton has all the ethics of a rattlesnake and the moral compass of a Hyena in feeding frenzy.

Having said that? Bill Clinton...as a President and not as a man.....DID bring the United States into SURPLUS on annual budget totals. He didn't do it for one year ..as a fluke...but a full 4 years under his leadership enjoyed green numbers for the first time in memory and probably the last time in history.....as we're looking at 1-2 TRILLION DOLLAR budget holes here on out while we're told there IS NO OTHER WAY.

Well... Bill Clinton found another way. Bill Clinton was also quoted months ago saying that letting the bush Tax Cuts expire under CURRENT economic conditions was insane. Obviously, he knows a thing or two about what works and what doesn't. Obama should have listened to those who know better. Next year will show why.

Clinton set the stage for some of the housing collapse...Yes. However, that wasn't a Presidential thing NEARLY as much as the direct doing of TWO INDIVIDUAL MEN. Both of whom took the coward exit and ran for the doors the first moment their yellow striped backs could get them there. Christopher Dodd and Barney Frank.

Let''s never forget that well after Clinton was a former President and within a year of the collapse, Franks was still saying anyone questioning the system was fear mongering and there was no harm in waiting to see how thigns turned out. Yea......There was a world of harm as it turned out, eh?

Originally posted by PvtHudson

Originally posted by tinhattribunal
oh yah!
the economy used to be good!
oh, i forgot about that.
i used to make ,uhh, money i think it was called.
there was like lots of ,ummm, work too.

thanks for the uplifting thread, guy!
hey! maybe we should elect clinton some more!

You didn't read the article, did you? It was a house of card Bill created. Obama inherited Bill's economy, not Bush's.

after your reply i went and read the article you've posted.

what a waste of time.

Originally posted by tinhattribunal

Originally posted by PvtHudson

Originally posted by tinhattribunal
oh yah!
the economy used to be good!
oh, i forgot about that.
i used to make ,uhh, money i think it was called.
there was like lots of ,ummm, work too.

thanks for the uplifting thread, guy!
hey! maybe we should elect clinton some more!

You didn't read the article, did you? It was a house of card Bill created. Obama inherited Bill's economy, not Bush's.

after your reply i went and read the article you've posted.

what a waste of time.

Yeah, kind of sucks to find out the MSM driven propaganda surrounding Bill was nothing more than political propaganda to keep people like you happy and blaming everyone else. Namely, Bush.

bill clinton is a 'business associate' of the bush family.
they are on the same side.

dig a little deeper into the inner workings of the financial world, it is much more intriguing than bi-partisan politics.

reply to post by PvtHudson


Clinton inherited Reagan's economic policy.

Bush inherited Clinton's economic policy.

Obama inherited Bush's economic policy.

It takes years for a economic policy to start showing results.Most folks tend to blame the wrong President.

reply to post by grey580


I have to agree with grey580 on this point.

The Housing Bubble was caused by a large number of factors, among these was the Affordable Housing Act of the early 90's that changed the rules by which Mortgage Lenders determined the risk levels or those applying for mortgages, forcing these same lenders to lend to people with lower Credit Scores. Also the Community Reinvestment Act made it illegal to discriminate lending based upon the neighborhood/location where the house in question was in. So people in poor neighborhoods that can be directly affected by an economic slowdown/layoffs would be considered higher risk to a Lender, and Lenders tried to avoid these loans.

These Laws caused Lenders to assume more risk than they normally would assume in an environment free from Government Intervention. But to shift this risk, mortgage giants like Fannie Mae and Freddie Mac bought up higher risk mortgages and then made them into Securities by means of Credit-Default Swap Insurance. Insuring high risk mortgages with a Credit-Default Swap enabled these securities to receive higher Credit Ratings from Ratings Agencies like Moody's and S&P, hiding the true risk and eventual toxicity from Securities Investors. So corporations that had bought these CDS backed Securities as a AAA rated safe asset, had more risk on their books than they realized.

When the economy began to slow down, and gas prices were at historic highs (for that period in time) People who had Sub-Prime Mortgages or Adjustable Rate Mortgages, upon missing a single payment, found the interest rates on their Mortgages begin to quickly climb, and their monthly payments to become unmanageable (this is what happened to my parents, which cause them to lose their house) This caused the Mortgages in these CDS backed Securities to become Toxic while retaining their AAA rating, meaning that these "assets" that looked and seemed to be safe on paper, were really a cancer on the books of Corporations.

This Housing Bubble, caused by Government Intervention in the housing market, that forced lenders to lend to formerly unqualified individuals, was also partly responsible for the Financial Crisis and Credit Crunch of '08.

But Bill Clinton and his cronies all got plenty rich, so if you ask him about the economy during his presidency, he will have only good things to say about it.

This is untrue. Also if you want to dig into the political mess, look a little harder into Bush and Bush JR. Clearly you are not a democrat. I am not an Obama lover, but the lesser of two evils. You are saying that 16 years of the Bush administration had nothing to do with our mess, but it was just the 8 years Bill was in office that caused it?.?

...And that's not the only thing, the ADVENT of more common Internet usage during the term of Clinton helped that stock bubble along. New technology was the crux of the economic boom. Clinton had nothing to do with it, even if it took place during his term in office.

Unfortunately, it is disinformation like this that covers-up the real causes of the housing bubble and deeper economic woes.

As we have discussed before, PVT, it was the passing of Gramm-Leach-Bliley that superseded Glass-Steagal in 1999 and allowed banks and investment firms to create new credit instruments.

That would include credit default swaps, derivatives and mortgage bundling. These are what caused the bubbles to burst, along with falling house values.

Clinton and Bush really have nothing to do with it. It was congress that passed the legislation that allowed the banks to do this and all the while they were receiving donations from the big banks.

So if you are looking to place blame...that is where it lies. To blame Clinton (or Bush) is disingenuous and flat-out wrong.

reply to post by PvtHudson


Repubs and demos screwed up and caused all of this to happen. Trying to pin it to one party is retarded.

Once you people lose your bias... maybe we can move forward.

Whether we blame Clinton or Bush or Obama is part of the problem. The truth is we can only blame ourselves. A president puts policy in place, the people have to carry it out. Every time we buy cheap foreign goods we kill American jobs. Every time we take out a loan we devalue the dollar. You can't have peace and justice along with greed and lust. Where in history has good mixed rightly with evil? Even in the individual man a war is started and what is a nation but a man of many parts?

I dont blame Clinton or Bush for the problems we curently face.
Clinton made loans available to people who couldnt afford them and while that wasnt the smartest plan, at the time it did wonders for the economy. He had no idea it would backfire years later like it did and cause a massive financial crisis. For that i will not "blame" him.
Bush did not drive planes into the towers, Congress voted to go to war in Iraq and Afghanistan, the Democrats hate it when you point it out but its the truth and its on record. Pelosi and Clinton were among those that voted yes btw. So it wasnt "Bushs" war like the Dems want you to believe, it was Americas War.
Here is where i start to assign blame, between the housing burst and the cost of fighting two wars we were in a position that Obama and his Democrat majority Congress needed to hurry and make changes immediately.
They did not.
Instead, they spent money we didnt have, they spent some more and when we started screaming uncle they continued to spend.
They bailed out corporations that later folded, they gave millions upon millions of dollars in grants to "Green" companies that upon receiving our tax dollars paid their execs and folded (Solyndra amomg many others).
Then there was Healthcare. Even the CBO said that it was going to cost Trillions more than he was saying it would, did that slow him down? Nope!
So today instead of being known as the President that took a financial crisis that was 20 years in the making and fixing it he doubled it in his first term alone!
Obama has no plan to fix our economy, he is only interested in shaping the nation into the nation he wants, not the nation our forefathers made for us.
Nope, i dont blame Clinton or Bush, they were backed into a corner and they did what was right at the time.
I blame Obama and the current admin that absolutely refuses to work with the Republican Congress to fix our problems and instead wants to continue spending us into oblivion.
The 53% that voted to keep their entitlements and welfare programs flowing didnt help either.
I just hope our nation can survive another four years.

reply to post by PvtHudson


Um you misread the article, it clearly states that Bush's administration created the 'housing' bubble to combat the other bubble. So Obama inherited Bush's economy because Bush used the same tactics of the man before and didn't do enough to surpass it. He decided more of the same was okay, and in that instance created a further unstable economy.

reply to post by PvtHudson


Clinton was bad for the economy, but so is every other person who tries to interfere in the free market. That simple. The main culprit is always the Fed chairman because he has the ability to interfere the most but all these other clowns help and support the effort.