They just don’t get it. I know; I’m beginning to sound like an old crank waving his fist and yelling at the damn kids to get off his lawn. But by “they” I mean politicos across the spectrum, left to right, Republican, Democrat, those in power in 1978, 1998 or 2008. They’re all responsible (along with many others) for the mess in which we know find ourselves, driven by high returns and higher poll numbers. The latest attempt at duck and cover comes from … well, the king of duck and cover. The New York Times David Leonhardt’s Economix blog tracks an interview with Bill Clinton on his financial legacy. And, while I don’t agree with much of the color commentary Leonhardt provides, the opening sequence is especially damning for the former Pres. Important stuff, since it’s especially important to get on record who said and did what when, and what they’re saying and doing now.
Mr. CLINTON: I don’t know if I would have done anything different. I do not believe this would have happened in this way if I had been in office or if Al Gore had been elected. I just don’t. I think we would have caught the housing bubble and taken steps to stem it before it got out of hand [emphasis mine]. And I know that having Arthur Levitt at the Securities and Exchange Commission would have made a huge difference.
ECONOMIX: This is a reasonable argument. But is there tangible evidence in its favor? Were there instances in which Mr. Levitt — or other Clinton advisers, like Timothy Geithner, Robert Rubin, Gene Sperling, Lawrence Summers and Laura Tyson — put a stop to financial excesses in the 1990s? … Alan Greenspan would still have been at the Federal Reserve and, in all likelihood, still been influential with the White House. Mr. Geithner did not stop the buildup in Wall Street leverage that has turned out to be so damaging. Mr. Summers issued warnings about the financial crisis before many others, but he did not issue them, at least not very loudly, in 2005, 2006 or even into 2007.
I love the recession rouge gallery Leonhardt lists – Summers, Geithner and especially Rubin. How relying on the advice of someone at the center of the Citi implosion would have avoided disaster is beyond me, but Clinton’s reasoning of a host of issues is very often “beyond me.”