5 ms·

Yes, the economy was soaring thanks to the technology and housing boom. You can pretend that our economy revolves around who's president and what political par

Yes, the economy was soaring thanks to the technology and housing boom. You can pretend that our economy revolves around who's president and what political party system they belong to but no matter how hard you pretend it still isn't true.

betterth 15y ago
Don't be dense, the parties have a lot of power in the economy. The crash of 2008? Many economists wisely point to Republican-led market deregulation, notably the repeal of Glass-Steagal in 1999, as the causes. Considering that Democrats fight for stronger regulation and pass them (Dodd-Frank... even if that one is DOA), while Republicans fight for deregulation, it's a bit off to imply that the party has no effect on the economy. That's a huge ideological difference and one that has significant effects on the economy, even in the short-mid term.
- akmiller 15y ago
  I agree that they have power but as I said above that power is usually not felt immediately. My top comment comes off like I'm a big time republican and that couldn't be further from the truth. I just want to point out that the great economy that Clinton benefited from was not his creation. I tend to agree that some of the deregulation did contribute to the crash in 2008. Some of that same deregulation also, very likely, contributed to the boom in the early 2000's.
- yummyfajitas 15y ago
  Many economists wisely point to Republican-led market deregulation, notably the repeal of Glass-Steagal in 1999... Um, Gramm-Leach was supported by a majority of both Dems and Reps. Clinton signed it. The only major dispute between the parties was over whether to make CRA compliance a precursor for banking mergers. (I.e., banks can't merge or acquire if they don't lend to enough minorities.) As far as I know, Bush's main forays into finance were Sarbox (increasing regulation), his ill-fated attempts to more strictly regulate Fannie and Freddie, and various laws pushing more people into homeownership (again, increasing regulation). Could you point out any acts of Republican-led market deregulation, ideally from the past 10 or so years?
  - gnaritas 15y ago
    > Um, Gramm-Leach was supported by a majority of both Dems and Reps. Clinton signed it. While this is true, of those who opposed it, the vast majority were Democrats. 58 Democrats opposed it, only 6 Republicans did. The Republicans also controlled both houses and wrote the legislation so they certainly deserve more blame. Repealing Glass-Stegal set the fuse by allowing banks to flip loans into the market offloading their risk, but it was the change in the net capital rule (http://en.wikipedia.org/wiki/Net_capital_rule#The_net_capital_rule_and_the_financial_crisis_of_2007-2009 http://en.wikipedia.org/wiki/Net_capital_rule#The_net_capita...) in 2004 under the Bush administration that lit the match and kicked off the crisis by creating a massive amount of potential credit that led to the banks handing out loans like candy to anyone who'd take em knowing they could immediately flip the loan and pocket the profit with little risk.
    - yummyfajitas 15y ago
      Repealing Glass-Stegal set the fuse by allowing banks to flip loans into the market offloading their risk... Glass-Steagall has nothing to do with the secondary market for mortgages. Banks were flipping loans in the early 80's. This is how Salomon Brothers became famous. ...the change in the net capital rule (http://en.wikipedia.org/wiki/Net_capital_rule#The_net_capita... http://en.wikipedia.org/wiki/Net_capital_rule#The_net_capita...) in 2004 under the Bush administration that lit the match and kicked off the crisis by creating a massive amount of potential credit that led to the banks handing out loans like candy to anyone who'd take em knowing they could immediately flip the loan and pocket the profit with little risk. I don't think you understand what you are talking about. Flipping is always low risk, regardless of whether you mark to market or mark to model. All the modified NCR rule would have done is allowed banks to hand out loans like candy and not flip them.
      - joelhaus 15y ago
        Flipping is always low risk Whoa... tell that to the folks who worked at Bear Sterns and Lehman during 2007/2008. This is precisely why all of the major banks needed a bail-out. The risk models all automatically assumed that these instruments would maintain their liquidity, but when that capital dries up, it turns into a game of musical chairs. When your business model fundamentally relies upon a liquid market for short-term credit[1], you typically end up in bankruptcy court when/if the music stops (unless of course you threaten the entire financial system and get a government bail-out). When the institutions you rely upon for credit lose faith that you can repay your debts, you're sunk. Mark to whatever, that only matters with long-term debt. [1] http://en.wikipedia.org/wiki/2007_subprime_mortgage_financial_crisis#Financial_institution_debt_levels_and_incentives http://en.wikipedia.org/wiki/2007_subprime_mortgage_financia...
ajross 15y ago
Last I checked the "Bush tax cut" was a real bill, championed by one particular party, passed via a vote that went broadly along party lines, and signed by a president of that party whose administration worked hard to put his name on it. The guy in the other party, as I remember, wanted to do something like "save social security now". Those are real policies, and they have real impact. You can pretend that they don't and that politics is all a "game", but no matter how hard you pretend it isn't true. (Sure, it's mostly a game, but at the margins it's important stuff, and not well served by bland internet cynicism).
- akmiller 15y ago
  Certainly the policies of the government in place can have an effect but for the most part that effect is not felt immediately and many times it can be years and years before any policy change ripples down to cause any type of drastic change in the economy. Suggesting that Clinton was responsible for the takeoff of internet companies in 2000 and the housing boom is silly. He was a major beneficiary of a great economic time.
  - redcap 15y ago
    Not Clinton, but you could make a case that Gore was responsible. There is a lot of noise laughing at him for supposedly saying he created the Internet, but he did co-sponsor an important bill in 1988, and was honored with a Webby Award in 2005 for contributions to the Internet. http://www.snopes.com/quotes/internet.asp http://www.snopes.com/quotes/internet.asp
    - yardie 15y ago
      He didn't invent the internet but he did open it for business. Until that bill the internet was effectively a research only tool.
  - rayiner 15y ago
    But suggesting that Bush's tax policy didn't have anything to do with the subsequent massive drop in federal revenues is not silly.
anamax 15y ago
>Yes, the economy was soaring thanks to the technology and housing boom. The big housing boom started post-Clinton. It was intentional, to get us out of the 1999 tech crash. Clinton benefited from the tech boom and the end of the cold war. (Bush I got hammered by the post-war transition recession, which ended before the election.)

betterth 15y ago

Don't be dense, the parties have a lot of power in the economy. The crash of 2008? Many economists wisely point to Republican-led market deregulation, notably the repeal of Glass-Steagal in 1999, as the causes. Considering that Democrats fight for stronger regulation and pass them (Dodd-Frank... even if that one is DOA), while Republicans fight for deregulation, it's a bit off to imply that the party has no effect on the economy. That's a huge ideological difference and one that has significant effects on the economy, even in the short-mid term.

akmiller 15y ago
I agree that they have power but as I said above that power is usually not felt immediately. My top comment comes off like I'm a big time republican and that couldn't be further from the truth. I just want to point out that the great economy that Clinton benefited from was not his creation. I tend to agree that some of the deregulation did contribute to the crash in 2008. Some of that same deregulation also, very likely, contributed to the boom in the early 2000's.
yummyfajitas 15y ago
Many economists wisely point to Republican-led market deregulation, notably the repeal of Glass-Steagal in 1999... Um, Gramm-Leach was supported by a majority of both Dems and Reps. Clinton signed it. The only major dispute between the parties was over whether to make CRA compliance a precursor for banking mergers. (I.e., banks can't merge or acquire if they don't lend to enough minorities.) As far as I know, Bush's main forays into finance were Sarbox (increasing regulation), his ill-fated attempts to more strictly regulate Fannie and Freddie, and various laws pushing more people into homeownership (again, increasing regulation). Could you point out any acts of Republican-led market deregulation, ideally from the past 10 or so years?
- gnaritas 15y ago
  > Um, Gramm-Leach was supported by a majority of both Dems and Reps. Clinton signed it. While this is true, of those who opposed it, the vast majority were Democrats. 58 Democrats opposed it, only 6 Republicans did. The Republicans also controlled both houses and wrote the legislation so they certainly deserve more blame. Repealing Glass-Stegal set the fuse by allowing banks to flip loans into the market offloading their risk, but it was the change in the net capital rule (http://en.wikipedia.org/wiki/Net_capital_rule#The_net_capital_rule_and_the_financial_crisis_of_2007-2009 http://en.wikipedia.org/wiki/Net_capital_rule#The_net_capita...) in 2004 under the Bush administration that lit the match and kicked off the crisis by creating a massive amount of potential credit that led to the banks handing out loans like candy to anyone who'd take em knowing they could immediately flip the loan and pocket the profit with little risk.
  - yummyfajitas 15y ago
    Repealing Glass-Stegal set the fuse by allowing banks to flip loans into the market offloading their risk... Glass-Steagall has nothing to do with the secondary market for mortgages. Banks were flipping loans in the early 80's. This is how Salomon Brothers became famous. ...the change in the net capital rule (http://en.wikipedia.org/wiki/Net_capital_rule#The_net_capita... http://en.wikipedia.org/wiki/Net_capital_rule#The_net_capita...) in 2004 under the Bush administration that lit the match and kicked off the crisis by creating a massive amount of potential credit that led to the banks handing out loans like candy to anyone who'd take em knowing they could immediately flip the loan and pocket the profit with little risk. I don't think you understand what you are talking about. Flipping is always low risk, regardless of whether you mark to market or mark to model. All the modified NCR rule would have done is allowed banks to hand out loans like candy and not flip them.
    - joelhaus 15y ago
      Flipping is always low risk Whoa... tell that to the folks who worked at Bear Sterns and Lehman during 2007/2008. This is precisely why all of the major banks needed a bail-out. The risk models all automatically assumed that these instruments would maintain their liquidity, but when that capital dries up, it turns into a game of musical chairs. When your business model fundamentally relies upon a liquid market for short-term credit[1], you typically end up in bankruptcy court when/if the music stops (unless of course you threaten the entire financial system and get a government bail-out). When the institutions you rely upon for credit lose faith that you can repay your debts, you're sunk. Mark to whatever, that only matters with long-term debt. [1] http://en.wikipedia.org/wiki/2007_subprime_mortgage_financial_crisis#Financial_institution_debt_levels_and_incentives http://en.wikipedia.org/wiki/2007_subprime_mortgage_financia...

ajross 15y ago

Last I checked the "Bush tax cut" was a real bill, championed by one particular party, passed via a vote that went broadly along party lines, and signed by a president of that party whose administration worked hard to put his name on it. The guy in the other party, as I remember, wanted to do something like "save social security now". Those are real policies, and they have real impact. You can pretend that they don't and that politics is all a "game", but no matter how hard you pretend it isn't true. (Sure, it's mostly a game, but at the margins it's important stuff, and not well served by bland internet cynicism).

akmiller 15y ago
Certainly the policies of the government in place can have an effect but for the most part that effect is not felt immediately and many times it can be years and years before any policy change ripples down to cause any type of drastic change in the economy. Suggesting that Clinton was responsible for the takeoff of internet companies in 2000 and the housing boom is silly. He was a major beneficiary of a great economic time.
- redcap 15y ago
  Not Clinton, but you could make a case that Gore was responsible. There is a lot of noise laughing at him for supposedly saying he created the Internet, but he did co-sponsor an important bill in 1988, and was honored with a Webby Award in 2005 for contributions to the Internet. http://www.snopes.com/quotes/internet.asp http://www.snopes.com/quotes/internet.asp
  - yardie 15y ago
    He didn't invent the internet but he did open it for business. Until that bill the internet was effectively a research only tool.
- rayiner 15y ago
  But suggesting that Bush's tax policy didn't have anything to do with the subsequent massive drop in federal revenues is not silly.

anamax 15y ago

>Yes, the economy was soaring thanks to the technology and housing boom. The big housing boom started post-Clinton. It was intentional, to get us out of the 1999 tech crash. Clinton benefited from the tech boom and the end of the cold war. (Bush I got hammered by the post-war transition recession, which ended before the election.)