I’m reading Bill Clinton’s new book Back to Work for a story, and I come across this admission about the former president’s economic judgment.
I made some mistakes, too, though not the ones I’ve been most widely critized for: aggressively enforcing the Community Reinvestment Act and signing the bill repealing the Glass-Steagall Act, the Depression-era law requiring commercial and investment banking to be done by separate institutions.
Right after I read this, I watch Newt Gingrich talk to Jake Tapper about financial reform. Isn’t there anything, asks Tapper, that Gingrich would do to control the banks?
“Repealing Glass Steagall was probably a mistake,” says Gingrich.
There we have it, 13 years after it could have mattered: Bipartisanship. But it’s a little more complicated, because these are, in Clinton’s view, overrated decisions. The CRA enforcement? “Making mortgages available to people in the community didn’t cause the meltdown.” The Glass Steagall decision? He gives himself one lash for that, but “by the time Glass Steagall was repealed, Federal Reserve rulings, beginning in the late 1980s, had already eliminated restraints on big banks’ ability to engage in both commercial and investment banking activities.” That didn’t make the repeal a good idea; basically, Clinton says his hands were tied.