Role of Jimmy Carter, Bill Clinton and Barack Obama in the Financial Crisis

September 26, 2008 · Filed Under Economy, Jimmy Carter 

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The root cause of the financial mess in the U.S. is the housing foreclosure crisis. But how did it happen?

The Community Reinvestment Act, as explained in the video, “Burning Down The House: What Caused Our Economic Crisis?“, was the genesis of the current state of the economy.

According to Wikipedia, this 1977 law requires banks and thrifts to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services, a practice known as “redlining.”

This was during the Carter administration with a Democratic Congress.

Then in 1995, during the Clinton administration, the Democrats added new provisions that forced banks to issue $1 trillion in “sub-prime” loans.

And have you heard of former Fannie Mae CEO Franklin Raines? His fingerprints are all over this mess from the start.

  • Carter Administration: he was associate director for economics and government in the Office of Management and Budget and assistant director of the White House Domestic Policy Staff from 1977 to 1979.
  • Fannie Mae: Vice Chairman from 1991 to 1996.
  • Clinton Administration: he was the Director of the U.S. Office of Management and Budget, where he served until 1998.
  • Fannie Mae: returned in 1999 as CEO.
  • Golden parachute: on December 21, 2004 Raines accepted what he called “early retirement” from his position as CEO while U.S. Securities and Exchange Commission investigators continued to investigate alleged accounting irregularities.

He also happens to be a guy the Obama administration has gone to for advice, according to the Washington Post:

He has shaved eight points off his golf handicap, taken a corner office in Steve Case’s D.C. conglomeration of finance, entertainment and health-care companies and more recently, taken calls from Barack Obama’s presidential campaign seeking his advice on mortgage and housing policy matters.

We gave Jimmy and Slick Willy a chance… we cannot afford Obama.