I had a very nice Thanksgiving. I hope you did, too. The kids got to see their cousins, I made some extremely buttery mashed potatoes for the feast, and we all enjoyed turkey and the rest of the usual.
At some point in the afternoon, discussion turned to the financial crisis, and there was some disagreement about where to place the blame for our current predicament. Two popular targets were Clinton and Bush.
If you are all political, or have relatives who are at all political, you will be having this discussion with friends and relatives, and there will be disagreement. Why not arm yourself in advance?
This financial crisis is one of "layered responsibility" according to Economist.com. FactCheck.org has written a response to those who would lay the blame completely at the feet of Democrats or Republicans. Home Buyers, Wall Street Firms, the Bush and Clinton administrations, Congress, the Fed, Alan Greenspan, and mark-to-market (but not Marky Mark, oddly enough).
Check out the FactCheck article "Who Caused the Economic Crisis?" for a debunking of the Clinton blame game (and also an explanation that financial institution deregulation was a bipartisan effort), and for a list of many of the contributing factors. Their list of references is a good place to go for details on the crisis.
For example, here in some of Clinton's own words, is a defense of some of his policies, along with an admission of some contribution to the problem:
"There are some people who believe that that bill enabled them to somehow participate in some of the riskier housing investments," Clinton said. "I disagree with that. That bill primarily enabled them to, like the Bank of America, to buy Merrill Lynch here without a hitch. And I think that helped to stabilize the situation."
Clinton, however, said that Democrats weren't entirely blameless, stating that they should have highlighted problems with Fannie Mae and Freddie Mac and "tried more aggressively to regulate derivatives."
He also acknowledged that there was possible danger in his administration's policy of pressing Fannie Mae, the mortgage company, to lower its credit standards for lower- and middle-income families seeking homes.
"I think, through the lens of this, it looks like that was true," Clinton said. "But let's go back to where we were at the time. At the time, they had lots of money, were making lots of money, and I thought too much of the money was being given out in value to the shareholders and compensation to the executives. And, at the time, we had a balanced budget and a surplus and a rapidly growing economy in other areas."
You can avoid many arguments by simply insisting upon one or two facts that let the hot air out of any purely partisan theory. You can also point out, as the former president does, that he was looking at a different world at the time -- one of growing prosperity and
shrinking deficits surpluses. But whichever way your party-goers are pointing the finger, note that there is plenty of finger-pointing to go around. Change the subject to a hope for a better future.
And hopefully, this leaves you with more time to enjoy the holiday cheer.Posted by James at November 28, 2008 10:08 AM