The Divide: American Injustice in the Age of the Wealth Gap Highlight

In the wake of the 2008 crisis, Clinton is most frequently criticized for overseeing two radical changes to our regulatory structure: the repeal of the Glass-Steagall Act to allow the mergers of investment banks, commercial banks, and insurance companies, and the Commodity Futures Modernization Act of 2000, which deregulated the burgeoning derivatives market. Less commonly understood is that Clinton, Greenspan, Rubin, and Summers also oversaw the collapse of what are known as “selective credit controls,” the tools used to rein in irresponsible lending. Rules like the Federal Reserve’s Regulations X and W, which mandated minimum down payments for things like home and automobile loans, were watered down if not eliminated completely during the Clinton years, and regulators under Clinton likewise refused to insist that banks and financial companies at least jack up their reserve capital to match all the crazy lending they were doing.