Kudlow: Don't Wax Nostalgic for Clinton Years

On Wednesday the Democrats trotted out former President Bill Clinton to remind the nation about the prosperity America experienced during the Clinton years.

But, according to CNBC's Larry Kudlow, prosperity during the 1990's came at a price. And we’re paying it right now.

Kudlow and other skeptics will tell you that the Clinton era was at best a mixed bag.

They argue that the housing bubble that devastated the American economy and can be traced back to 1999, when Clinton was in office.

At that time, the White House advocated a program in which Fannie Mae was encouraged to extend home mortgages to individuals whose credit was generally not good enough to qualify for conventional loans.

Flash forward to 2007 and the term subprime mortgage had become part of the daily lexicon.

“Fannie Mae and Freddie Mac were at the epicenter of the housing crisis,” insisted Steve Moore, senior economics writer and WSJ Editorial Board member on The Kudlow Report. "And people forget all that began under Clinton."

Also critics argue that it was Clinton who repealed The Glass-Stegall Act, which for decades had separated commercial banking from investment banking. And they say Clinton signed the Commodity Futures Modernization Act — which exempted all derivatives, including the now notorious credit-default swaps, from federal regulation.

However, not every agrees with Larry Kudlow and Steve Moore.

David Goodfriend, a former Clinton White House official certainly doesn't.

He argued these metrics don’t matter. “People who focus on those metrics are focused on the wrong metrics,” he said. And he reminded, "President Clinton in 1993 passed the balanced budget plan without support from the GOP."

And on top of all that, Goodfriend added the Bush administration could have made changes at any time.

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