I’m not really in the mood to comment on every detail of Bill Clinton’s appearance on The View. But he did get me thinking about our current economic mess.
As a conservative who doesn’t like the government to spend lots of money, I’m not too happy about all these government bail-outs. Yet, something has to be done, since there are profound economic ramifications when these lending institutions don’t have money. That’s why I have problems with the conservative/libertarian spiel of “the government can’t bail them out because that will encourage them to be irresponsible in the future.” I agree with that statement, but we can’t just let the economy collapse because of people’s irresponsibility.
Bill Clinton reminded the audience of Hillary’s proposal during the primaries. He said that most of the people who took out sub-prime loans can pay a mortgage, but the mortgage needs to be repackaged according to their ability to pay. Then, the institutions will actually make money.
Can this work? What about the homes that have already been foreclosed?
I didn’t understand everything Bill Clinton was saying. He was trying to say that the Gramm-Leach-Bliley law didn’t contribute to the present crisis. He didn’t explicitly mention that law, but he was talking about banks being allowed to invest. I didn’t get his argument, so I may have to wait for the transcript.
Clinton also said that the boom in the stock market under his administration may have led to these problems. I’m not sure if he meant that the growth made the stock market too big for oversight, or what exactly he was saying.
Unfortunately, they didn’t discuss Clinton’s “reform” of the Community Reinvestment Act, which increased the number of loans to people less able to pay them back.
To be honest, I don’t understand a lot about economics. I tried to read articles on the sub-prime mortgage crisis, and my response is usually “huh?” I wonder if there are alternatives to these costly federal bailouts.