Fox Takes Clinton Out Of Context In Effort To Distract From Trump’s Hope For Housing Crisis
Research ››› ››› TYLER CHERRY
Fox & Friends deceptively edited a 2007 video of Democratic presidential candidate Hillary Clinton to claim that Clinton blamed homeowners for the housing market crash and that she is “flip flopping now” to blame Wall Street. But the speech transcript shows that Clinton indeed blamed Wall Street and a host of other financial actors, saying Wall Street “helped create the foreclosure crisis” and bears “responsibility” for the crash. Fox also downplayed Donald Trump’s expressed hope for a financial crisis in 2006, instead blaming former President Bill Clinton for a market crash and historic recession that occurred during the waning days of the Bush administration.
Fox & Friends Deceptively Edits 2007 Video Of Hillary Clinton Blaming Wall Street For Risky Business Dealings
Fox Claims Hillary Clinton Blamed Homeowners For Recession In 2007, Now Flip Flopped To Blame Wall Street. Fox & Friends accused Hillary Clinton of switching her position on who bears responsibility for the financial crisis that deepened the Great Recession, editing a speech Clinton gave in 2007 to show only the part where she said, “borrowers share responsibility as well. Homebuyers who paid extra fees to avoid documenting their income should have known they were getting in over their heads.” Fox co-host Steve Doocy used the clip to claim Clinton was switching her position, saying, “Hillary Clinton actually, these days she's blaming Wall Street. However back in the day in 2007 she was blaming the homeowners.” Co-host Ainsley Earhardt said Clinton was “flip flopping now.” From the May 25 edition of Fox News’ Fox & Friends:
STEVE DOOCY (CO-HOST): So Hillary has got this [ad] out saying that about [Trump]. It's interesting, he has not changed his position. Buy low, sell high. However, Hillary Clinton actually, these days she's blaming Wall Street. However, back in the day in 2007 she was blaming the homeowners. We've got two pieces of tape we are going to put -- butt them up to each other. The first one is of her, I believe at a CNN debate this year and then we're going to take you back to a speech she gave in 2007 where she blames homeowners themselves.
AINSLEY EARHARDT (CO-HOST): So a lot of people -- she's flip flopping now. A lot of people did get in over their heads and that's why they lost money. And that was tragic and we watched a lot of people lose everything in this country. It was awful. But a lot of people did make a lot of money during that time. [Fox News, Fox & Friends, 5/25/16]
But Clinton’s 2007 Speech Excoriated Wall Street For Helping To “Create The Foreclosure Crisis”
Full Transcript Of Clinton’s 2007 Speech Shows She Berated Financial Industry, Said “Wall Street Helped Create The Foreclosure Crisis” And Bears “Responsibility.” In the December 2007 speech cited by Fox, Clinton blamed Wall Street, mortgage lenders, and brokers for the housing crash, saying, “responsibility also belongs to Wall Street, which not only enabled but often encouraged reckless mortgage lending.” Clinton also said, “Responsibility belongs to mortgage lenders and brokers … to the [Bush] Administration and to regulators … [and] to the rating agencies.” Clinton heavily criticized Wall Street throughout the speech, saying, “Some people might say Wall Street only helped to distribute risk. I believe Wall Street shifted risk away from people who knew what was going on onto the people who did not.” From the transcript of Clinton’s December 5, 2007 speech (emphasis added):
So I'm here today to call on Wall Street to do its part - to help end the foreclosure crisis that is devastating middle class families and threatening the health of our economy.
Wall Street needs to be part of a comprehensive solution that brings to the table all those responsible and calls on them to do their part. Wall Street helped create the foreclosure crisis, and Wall Street needs to help us solve it.
Let's start with an honest, clear-eyed assessment of what went so terribly wrong.
Now, who's exactly to blame for the housing crisis? Well, that's always a question that the press and people ask and I think there's plenty of blame to go around.
Responsibility belongs to mortgage lenders and brokers, who irresponsibly lowered underwriting standards, pushed risky mortgages, and hid the details in the fine print.
Responsibility belongs to the Administration and to regulators, who failed to provide adequate oversight, and who failed to respond to the chorus of reports that millions of families were being taken advantage of.
Responsibility belongs to the rating agencies, who woefully underestimated the risks involved in mortgage securities.
And certainly borrowers share responsibility as well. Homebuyers who paid extra fees to avoid documenting their income should have known they were getting in over their heads. Speculators who were busy buying two, three, four houses to sell for a quick buck don't deserve our sympathy.
But finally, responsibility also belongs to Wall Street, which not only enabled but often encouraged reckless mortgage lending. Mortgage lenders didn't have balance sheets big enough to write millions of loans on their own. So Wall Street originated and packaged the loans that common sense warned might very well have ended in collapse and foreclosure. Some people might say Wall Street only helped to distribute risk. I believe Wall Street shifted risk away from people who knew what was going on onto the people who did not.
Wall Street may not have created the foreclosure crisis, but Wall Street certainly had a hand in making it worse. [University of California, Santa Barbara, The American Presidency Project, accessed 5/25/16]
PolitiFact: Clinton “Called For Wall Street Regulations Early In The Financial Crisis.” PolitiFact rated Clinton’s claim that “she ‘called for addressing risks of derivatives, cracking down on subprime mortgages and improving financial oversight’ early on in the financial crisis” as “True.” PolitiFact linked to several speeches, which showed “Clinton began addressing the subprime mortgage issue in her appearances in March 2007. Later that year, she took on derivatives. She also proposed specific plans for solving these problems and increasing oversight of financial institutions.” [PolitiFact, 7/15/15]
Fox Also Defended Trump For Rooting For The Crash And Blamed It On President Bill Clinton
Fox Hosts: Trump Hoping For Market Crash Shows “He Seems To Understand … Business,” Blame Bill Clinton Instead. In the same May 25 Fox & Friends segment, the co-hosts also whitewashed Trump’s 2006 comments, unearthed by CNN, that he “sort of hope[d]” that the housing market would collapse, so that “people like me would go in and buy.” Co-host Brian Kilmeade said of Trump’s comments, “he seems to understand … business,” and Steve Doocy said, “It’s interesting, [Trump] has not changed his position. Buy low, sell high.” The hosts instead deflected blame to Bill Clinton, with Doocy saying, “In addition to repealing Glass-Steagall during his tenure, he also loosened the housing rules by rewriting the Community Reinvestment Act which put pressures on banks to loan money to people in low income neighborhoods.” From the May 25 edition of Fox News’ Fox & Friends:
BRIAN KILMEADE (CO-HOST): Well, I mean, what [Clinton] is saying there is that Donald Trump was doing an interview on another network and came out and said of course, you know, if this crash might be good for me because I can go in and I could buy at these low rates and it comes off -- it does come off a little crass in isolation. I haven't heard the whole interview. But if you really want to pass blame around, if you want to take this to the next level, you can go back to Bill Clinton who once said -- started pushing all the sub prime rates that caused the whole crash. Nobody said that Donald Trump caused the whole crash. And by the way, he seems to understand, Ainsley, business. You don't really want to buy real estate when it's high.
STEVE DOOCY (CO-HOST): So Hillary has got this [ad] out saying that about [Trump]. It's interesting, he has not changed his position. Buy low, sell high.
DOOCY: And Brian's point about you know if you're going to talk about Donald Trump back in the day, talk about Bill Clinton. In addition to repealing Glass-Steagall during his tenure, he also loosened the housing rules by rewriting the Community Reinvestment Act which put pressures on banks to loan money to people in low income neighborhoods. Which led in part to the big crash. [CNN.com, 5/19/16; Fox News, Fox & Friends, 5/25/16]
Top Economists Reject That Bill Clinton’s Policies Are To Blame For Financial Crisis
Fmr. Federal Reserve Chairman Ben Bernanke: Experience "Runs Counter To The Charge That CRA Was At The Root Of … The Current Mortgage Difficulties." On November 25, 2008, Federal Reserve chairman Ben Bernanke stated: "Our own experience with CRA (Community Reinvestment Act) over more than 30 years and recent analysis of available data, including data on subprime loan performance, runs counter to the charge that CRA was at the root of, or otherwise contributed in any substantive way to, the current mortgage difficulties." Bernanke further wrote:
Further, a recent Board staff analysis of the Home Mortgage Disclosure Act and other data sources does not find evidence that CRA caused high default levels in the subprime market.
As the financial crisis has unfolded, many factors have been suggested as contributing to the current mortgage market difficulties. Among these are declining home values, incentives for originators to place loan quantity over quality, and inadequate risk management of complex financial instruments. The available evidence to date, however, does not lend support to the argument that CRA is to blame for causing the subprime mortgage crisis. [Accessed via United States Government Published Office, 5/25/16]
Fmr. SF Reserve Bank's Yellen: "[S]tudies Have Shown That The CRA Has Increased The Volume Of Responsible Lending To Low- And Moderate-Income Households." Federal Reserve chairwoman Janet Yellen, then president and CEO of the Federal Reserve Bank of San Francisco, in a March 2008 speech criticized efforts to blame CRA lending for weaknesses in the mortgage market, stating, “There has been a tendency to conflate the current problems in the subprime market with CRA-motivated lending … [but] studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households” :
There has been a tendency to conflate the current problems in the subprime market with CRA-motivated lending, or with lending to low-income families in general. I believe it is very important to make a distinction between the two. Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans, and studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households. We should not view the current foreclosure trends as justification to abandon the goal of expanding access to credit among low-income households, since access to credit, and the subsequent ability to buy a home, remains one of the most important mechanisms we have to help low-income families build wealth over the long term. [Federal Reserve Bank of San Francisco, Janet L. Yellen’s Speeches, 10/10/08]
Slate's Gross: "The Notion That The Community Reinvestment Act Is Somehow Responsible For Poor Lending Decisions Is Absurd." In an October 7, 2008, Slate article, Daniel Gross, a business columnist for Newsweek and author of Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation, criticized the notion that affordable housing initiatives caused the financial crisis, writing that "the notion that the Community Reinvestment Act is somehow responsible for poor lending decisions is absurd" and that "lending money to poor people and minorities isn't inherently risky. There's plenty of evidence that in fact it's not that risky at all." Gross further explained, "On the other hand, lending money recklessly to obscenely rich white guys ... can be really risky. In fact, it's even more risky, since they have a lot more borrowing capacity." [Slate, 10/7/08]