Bill Clinton fires back at critics of his financial regulatory policies
Former President Bill Clinton on Wednesday delivered a message to critics of his financial regulatory policies: Back off.
“Getting rid of Glass-Steagall didn’t have anything to do with the crash,” Clinton said at the Peter G. Peterson Foundation’s 2014 Fiscal Summit in Washington. “Everybody acts like I sat in a closet and said, ‘What can I do for Wall Street today?'”
Some progressives have blamed Clinton’s 1999 repeal of Glass-Steagall, a Depression-era law that separated investment and commercial banking, as one of the causes of the 2008 financial crisis.
Clinton said that none of the financial institutions that failed during the financial crisis crashed because of Glass-Steagall’s repeal.
“Not one,” Clinton told the panel’s host, PBS News’s Gwen Ifill. “Lehman Brothers was an investment bank and Bear Stearns was an investment bank.”
Progressives, including Sen. Elizabeth Warren (D-Mass.), have pushed to reinstate Glass-Steagall. Warren introduced an updated version in July 2013, along with Sen. John McCain (R-Ariz.) that hasn’t seen any traction in Congress.
Clinton and his wife, former Secretary of State Hillary Clinton, are facing scrutiny from the left about the couple’s ties to Wall Street. His financial legacy could prove a headache should she run for president in 2016 and face a challenger from the left.
The former president, though, defended his legacy Wednesday, and blamed what he saw as lax regulatory enforcement after he left office for the financial crisis.
“If I had known that basically we would see the end of the banking and SEC oversight after I left office, would I have signed it? Probably not,” Clinton said.
“But would it have passed? Absolutely,” he continued. “Let me remind you, that bill passed 90-8 in the Senate.”
Asked by Ifill if “anti-Wall Street rhetoric is running too hot,” Clinton said it was fair to say that “too much of our growth has been concentrated in finance.”
“I believe that. I’ve been saying that for well over a decade,” he added.
Clinton, though, reiterated his regret over eventually signing the Commodities Futures Modernization Act, which critics say removed regulatory oversight over some risky financial instruments.
“If I had to do it again, I would have vetoed the bill, even though they would have passed it and overridden my veto in a heartbeat,” Clinton said.
“It precluded the CFTC and anybody else from regulating financial derivatives. And I thought it was a mistake at the time,” he added.
Clinton also weighed in on tax reform, advocating that Congress take up a piecemeal approach.
“We should start with corporate tax reform,” Clinton said. “There are lots of options here, but I think it’s a mistake to put it off until we have the ideal individual income tax system. I’m sure I’m making a bunch of people in Congress who have been working on this for years mad, but we’ve got to unlock this money.”
But, he cautioned, that lawmakers looking for additional revenues “can’t just tax our way out of this.”
This story was updated at 3:27 p.m.