Beware of Clintons bearing gifts
Published in The Tennessean , Sunday, September 2, 2012 and in FORBES with archives . by Richard J. Grant To summarize the economic performances of American presidents, a well-known economic adviser once remarked, “I like principled conservatives and unprincipled liberals.” This, by way of introducing former president Bill Clinton who, in his recent convention speech, is widely believed to have boosted the reelection chances of President Barack Obama. But Clinton's greatest gift to Obama was placed under the tree almost 20 years ago. Clinton recognized the untapped potential in some Carter-era legislation, the Community Reinvestment Act (CRA), which would give his administration leverage over financial institutions to increase loans to members of key voting blocs despite their relatively poor credit ratings. The subprime market had always existed because the higher risks were balanced by higher fees and interest rates, but the CRA pressured banks to increase loans and to ho...