Comment by godelski | Hacker News Reader

Comment by godelski | Hacker News Reader

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Not an executive order, but what led to the 2009 financial crisis was mostly done under the Clinton administration.

Honestly I think this is something us humans are really bad at (well we're known to be bad at this). Understanding causal effects through time. Not only are we bad at understanding causal facts but we're really bad at being forward thinking and understanding temporal phenomena.

But I think the main point that the gp is making is that most of the things that happen under a president aren't really felt till well after they have left office. Many wins that presidents have are due to effects from former presidents. Like both Obama and Trump got praised for high S&P 500 values at the beginning of their presidencies. Obama came in after a big crash. There's also no way Trump could be a causal factor for growth in the first 3 months of his presidency. You can't really have that kind of effect that early on. Yes these presidents contributed to these markets, but it would be naive to say that the growth was because of them. Or we can look at the long lasting effects of Regan. Or even Civil Rights and Johnson. While there was more immediate consequences under both these presidents there were also very long term effects that we still see today.

I have no idea what you think happened under the Clinton era to cause the financial crash of 2009. Most of the immediate things, such as the housing boom driven by easy lending policies, happened under Bush.

So I'd need a reference to support that idea.

However I'll give you another one. Most people's impression is that Carter destroyed the economy and Reagan's deregulation saved the day. But actually the facts are almost exactly reversed - Carter did the deregulating but the benefits were not seen until Reagan was in power.

See https://noahpinion.substack.com/p/much-of-what-youve-heard-a... for a reference.

The post you are responding to is probably referring to the Gramm–Leach–Bliley Act. According to some, that act (signed by Clinton) was (somewhat) responsible for the financial crash. But this is certainly a matter of dispute.

To expand, this law allowed investment banks (e.g. Goldman) and commercial banks (e.g. Washington Mutual) to do what the other could. Effectively this allowed the mortgage backed securities that were a major player in the financial crisis to be created. There were a lot of other issues that contributed to the crisis, but (as far as I'm aware) the main mechanism used would not have been possible without this deregulation.

Eh. It allowed banks to have in house investment banks. They still needed to have walls that dealt with conflicts of interest between the two. Whether the walls work all the time can be disputed.

But you seem to have offered no substantial link to the existence of MBS securities and the repeal of Glass-Steagall. so your conclusion, that arbitrary deregulation, lead to the existence of MBS securities should be even more disputed.

MBS are probably more clearly linked to the complete takeover of the mortgage market by the government. if you turn debt into a commodity you can divide it up however you want. and you turn debt into a commodity by guaranteeing it.

Not OP, but the Glass-Steagall Act was repealled in 1999, under then-president Bill Clinton, and is posited as a substantial contributor to the 2007-8 Global Financial Crisis.

<https://en.wikipedia.org/wiki/Aftermath_of_the_repeal_of_the...>

<https://web.archive.org/web/20111019192852/http://prospect.o...>

Canada had no equivalent of the Glass-Steagall Act, but its banks didn't suffer like the US banks did. Why would the seperation of commercial and investment banks only be important in the United States and not in other countries?

Other banks were also buying US based securities.

But you also seem to be assuming that there was a single causal factor or that people are claiming there is a single causal factor. Neither of these are true. There were many factors at play.

My only claim with Clinton was that he did things that helped lead to the events and people do not attribute that to him because he was not the acting head of state. My claim was not about a singular causality, and that would be a pretty bad faith read.

Fair question.

Canada did suffer during the 2007-8 crisis, though its banking system didn't collapse as the US system did.

The reasons suggested are various. I'm not an expert on either the US or Canadian experiences, though some quick searches suggest a few explanations, including an overall different regulatory and banking environment in Canada (far more centralised to the Federal government rather than distributed to numerous states). NBER and a few other sources look promising.

So there are things that happened under Clinton that have been posited as contributing to the financial crash, so the guy who was President for the last 8 years leading up to the crash must be blameless.

Yeah, not buying it. There are lots of things that happened under Bush that are also posited as contributing to the crash. And 8 years is more than long enough for Bush's policies to have contributed.

> so the guy who was President for the last 8 years leading up to the crash must be blameless.

That's not the argument being made. The argument being made is that actions under a president outlast the president and have to be considered as part of their legacy. Bush isn't blameless but that also doesn't mean Clinton gets off Scot-free.

The argument is about how attribution to current events doesn't solely lie upon the current acting head of state.

Saying "blameless" overstated the case.

But the comment I was responding to said:

> ...what led to the 2009 financial crisis was mostly done under the Clinton administration...

That goes well beyond "Clinton doesn't get off Scot-free" all of the way to, "Clinton should get most of the blame."

I'm firmly in agreement that Clinton contributed. But I'm going to need serious convincing that what he did was more important than, say, failing to enforce regulations against fraudulent advertising on subprime mortgages. Or blocking the 2005 GSE reform bill which would have allowed more action before that problem blew out of control.

> "Clinton should get most of the blame."

I apologize, this was not my intent.

godelski's already responded to their intent.

I was simply answering the question as to what might have been referred to as occurring during the Clinton administration. Not its overall significance in subsequent events.

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