Clinton Pushes Back Against Bush on Roots of Crisis

Former President Bill Clinton pushed back against the suggestion that the current economic crisis happened under his watch.

Clinton was asked on NBC’s “Today” to respond to President Bush’s suggestion in his televised address Wednesday that the financial system’s problems began more than a decade ago, during the Clinton administration.

Bush said: “Well, most economists agree that the problems we’re witnessing today developed over a long period of time. For more than a decade, a massive amount of money flowed into the United States from investors abroad because our country is an attractive and secure place to do business.”

Here’s how Clinton responded:

Well, I think he’s suggesting that, when we — I signed a bill [the 1999 Gramm-Leach-Bliley Act] that the banking industry wanted to let them get into securities issuance there. There are some people who believe that that bill enabled them to somehow participate in some of the riskier housing investments. 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.

I think that the main thing that you could blame the Democrats for, maybe, is that we should have made more of the problems of Fannie Mae and Freddie Mac and maybe the — and tried more aggressively to regulate derivatives. But this thing really took off when the SEC, under this administration, exercised less oversight and they got rid of something called the uptick rule, which enabled betting down… on housing stocks to go crazy.

Clinton, however, sounded reluctant to take sides in the debate over debates in the presidential campaign. When asked by NBC’s Matt Lauer whether John McCain was playing politics with the economic crisis by suspending his campaign Wednesday and calling for a delay to Friday’s debate, Clinton said that McCain wasn’t.

First of all, I don’t have a judgment about whether it would be a good or bad thing to do. But we know — I mean, he wanted actually more debates, so we know he wasn’t afraid of the debates.

I think he’s probably looking for some way of, once again, to say to the American people, “Hey, I’m not a traditional Republican. And I do take this seriously.” Because otherwise this makes it much, much more difficult for him to win because this is associated with lax regulation and the absence of economic activity in this period.

I think — but I think, you know, they both issued a statement last night, which I thought was a good thing, their joint statement. Because I really do believe that if it looks like they’re playing politics with this and there’s a delay, then that’s bad for the confidence.

I think, if it looks like — they’re going back to Washington, which apparently they both are… at the invitation of the president, to get their briefing, they will participate in the lawmaking, the work of their jobs, I think we’ll be all right. They’ve been — they’ve — both of them have gone out of their way, I think, not let this whole thing get too much caught up in the politics.