Hillary Clinton’s campaign is airing an attack ad accusing Donald Trump of “root[ing] for the real estate crash,” while ignoring that many of Clinton’s own top corporate donors were implicated in helping to cause the subprime-mortgage crisis and the roots of the crisis, many argue, trace back to Bill Clinton’s administration.
USA Today provided a helpful transcript of the 45-second ad:
It starts off with video and audio from the financial crisis.
“This is an economy that can’t find the bottom of bad news,” one reporter says.
“Ten years of saving, completely gone — vanished,” another says.
“The biggest crash of household wealth that we’ve ever had in the United States,” someone else says.
“9 million Americans lost their jobs,” text on the screen reads. “Five million families lost their homes,” another follows.
“And the man who could be our next president was rooting for it to happen,” it says over a picture of Trump sitting in an ornately decorated room.
The video then features audio of Trump from 2006 stating, “I sort of hope that happens because then people like me would go in and buy. If there is a bubble burst, as they call it, you know, you could make a lot of money.”
The ad ends with the words, “If Donald wins, you lose.”
The Trump remarks come from a 2006 audiobook session from Trump University, where the billionaire was speaking as a real estate businessman and responding to a question about “gloomy predictions that the real estate market is heading for a spectacular crash.”
Trump’s comments came in the context of explaining how he himself was “in a good cash position,” meaning he’d made wise investments as opposed to others in the same business, and “If you’re in a good cash position — which I’m in a good cash position today — then people like me would go in and buy like crazy.”
Trump was making a logical statement about purchasing potentially valuable real estate at low prices, which is the baseline goal of the real estate business. This is opposed to some of Clinton’s own top donors, who were implicated in the crisis and had to pay major settlements to the government for their roles.
In 2013, former Sen. Phil Gramm, (R-TX), explained in the Wall Street Journal that the roots of the financial crisis trace back to so-called affordable-housing goals established by Bill Clinton’s administration, which “led to a massive increase in risky, subprime mortgages.”
Gramm, writing with Mike Solon, a partner at US Policy Metrics, where Gramm now works, explained that Clinton and Labor Secretary Robert Reich led an effort to get pension funds to invest in affordable housing, but could only conjure up about $100 million in investments.
Instead, Clinton successfully drafted Fannie Mae, Freddie Mac and the commercial banking system into his affordable housing efforts. “It did so by exploiting a minor provision in a 1977 housing bill, the Community Reinvestment Act, that simply required banks to meet local credit needs,” they wrote.
Bank regulators began to pressure banks to make subprime loans. Guidelines became mandates as each bank was assigned a letter grade on CRA loans.
They write that the near partnership between the companies and government regulators extended into the Bush administration, but the tone was set under Bill Clinton.
Effective in January 1993, the 1992 housing bill required Fannie and Freddie to make 30% of their mortgage purchases affordable-housing loans. The quota was raised to 40% in 1996, 42% in 1997, and in 2000 the Department of Housing and Urban Development ordered the quota raised to 50%. The Bush administration continued to raise the affordable-housing goals. Freddie and Fannie dutifully met those goals each and every year until the subprime crisis erupted.
Meanwhile, top Clinton campaign contributor Goldman Sachs, which paid the candidate $675,000 in speaking fees, originally won big from the mortgage meltdown. Clinton has yet to release the transcripts of her speeches to Goldman Sachs and other Wall Street firms.
In a December 2007 Wall Street Journal article titled, “How Goldman Won Big On Mortgage Meltdown,” the newspaper noted that “thanks to a tiny group of traders,” the company “has generated one of the biggest windfalls the securities industry has seen in years.”
Goldman Sachs eventually settled with government regulators for $1.5 billion for its role in the crisis.
CBS News reported on the settlement:
Goldman admitted that in bundling mortgages from subprime loan specialists like Countrywide Financial – and then selling them to investors as bonds – it largely failed to address financial problems it knew about.
Other banks that settled for their own roles in the mortgage meltdown read like a who’s who of top Clinton donors:
In February, Morgan Stanley settled for $3.2 billion, Wells Fargo agreed to pay $1.2 billion, J.P. Morgan Chase paid $13 billion three years ago, and Bank of America coughed up a whopping $16.6 billion in 2014.
Bank of America reportedly paid Bill and Hillary Clinton more than $1 million for four speaking gigs between 2011 and 2014.
Hillary Clinton’s campaigns have received major support from Goldman Sachs, Bank of America, and J.P. Morgan Chase.