Bill Clinton on Economy: "Don't look at me!"

In a recent interview with CNN's John Roberts, Bill Clinton flatly denied that his administration had anything to do with the current economic crisis, save of course that he should have regulated derivatives more closely. Really? Is that all? Nevermind that derivatives are at the heart of the problem we now face.

Derivatives, or financial instruments whose value is based on that of another financial instrument, are the very same toxic assets that the banks are being rescued from as we speak, namely the MBS's I discussed in a previous entry. Had derivatives been regulated in the 90's (or under Bush 43 for that matter), this crisis would not have reached the depths it has now tumbled to. I'm usually a free market laissez faire true-believer when it comes to economics, but as we have seen in recent months, some things (and people) bear watching.

He deftly dodged on the repeal of Glass-Steagall; specifically his role in the repeal and it's unintended consequences. He's technically correct that the New Deal era act that created the FDIC and limited speculation by banks had been being rolled back since 1980, but it the last nail was driven into the law's coffin in 1999 by the Gramm-Leach-Bliley Act. And although the GOP in congress had enough votes to ostensibly override his veto, Clinton did not voice any serious reservations, and signed the bill. I agree with Clinton that the 1999 law did not directly cause this crisis, diversification of assets is a good thing. However, the derivatives market was the Achilles' heel of this new era of deregulation, and it wounded us...though hopefully not as badly as Paris' arrow wounded the Greek hero.

No one can claim that the 8 years of Bill Clinton's presidency caused this economic meltdown. And furthermore, it is obvious that Bush 43's intervening 8 years did not prevent this crisis. Both men, as well as Congress, and a host of bad managers in the financial world share the blame. But Bill Clinton's "who, me?" attitude we grew accustomed to during his impeachment is more than a little insulting at a time when so many people (who mostly still love his for some reason) are in dire straits.

Nolanbuck