Another Hillary Falsehood: She Didn’t Tell Banks to “Cut it Out” Pre Crisis; She Blamed Homeowners

I’m late to correct a Big Lie from the last Democratic debate, in which Hillary astonishingly said went to Wall Street to tell banks to cut our foreclosures in 2007.

I knew this was untrue the minute I heard it because no one in Congress told banks to “cut out” foreclosures even when the crisis got much worse, and least of all, a Blue Dog Democrat who represents Wall Street and became Senator here as opposed to the more logical Illinois with the intent of currying favor with them. Concerned Congressmen were pleading with regulators and making legislative proposals, like for a new Home Owners Loan Corporation, modeled on a successful Depression model. After Obama made it clear he was all in with supporting the banks as of March 2009, there was not much ground for making a case to the banks directly.

But Clinton didn’t simply pretend to do something she didn’t. She abjectly falsified her history. In the debate, she said she went to Wall Street in December 2007. That much she did do. But rather that get tough with financial firms as she claimed, she went with the “everyone’s to blame” line, which of course means no one is to blame….except for those greedy borrowers:

And yes, this speech was made in December 2007, at the NASD. She starts by praising Wall Street and saying how important it is that Wall Street remain cutting edge, indeed “the global capital of finance.” But she then suggest that there’s a wee problem, in that not everyone is sharing in the prosperity it creates. This is as strong as she gets in criticizing financiers:

But finally, responsibility also belongs to Wall Street, which not only enabled but often encouraged reckless mortgage lending…..Wall Street may not have created the foreclosure crisis, but Wall Street certainly had a hand in making it worse.

And in the very next line, she started walking it back:

We also must recognize, though, that good things have happened in the housing market. Home ownership is at the heart of the American Dream, and ownership rates rose to a record 69 percent in 2006.

And then she gave bromides about how this was all complicated, and that Big Finance needed to go along voluntarily with some proposals of hers…which had she bothered to investigate how securitizations worked, she would known some could not have been implemented.

There’s nothing remotely critical of the financial services in this speech. All she does is brandish a wet noodle: if all the germane parties don’t go along, she’ll “consider” legislation.

As US Uncut pointed out, Hillary did make some speeches that were more borrower-friendly, such as one in upstate New York in March 2007 to a rural audience at an event organized by a rural development organization. In other words, Hillary was playing to her audience. That’s not a sin per se, but we can see which audiences really mattered to her. US Uncut reminds us:

As the Daily Beast pointed out, Clinton’s tough talk doesn’t jibe with her Senate record. When a sweeping housing reform passed the Senate in 2008, it did so without Clinton’s leadership. Senator Clinton didn’t even vote in favor of a bipartisan bill that would have repealed the carried-interest tax loophole often exploited by hedge fund managers and Wall Street executives, something she’s campaigned on as recently as last year….

Throughout the course of her political career, JP Morgan contributed nearly $700,000 to her campaign war chest, making them her 4th-largest all-time donor. After Clinton left the State Department, she was paid $225,000 by Bank of America for just one speech. Bear Stearns contributed approximately $50,000 to Clinton’s campaign between 1999 and 2004. Merrill Lynch gave over $33,000 in that same time cycle.

It’s not surprising that Hillary hasn’t been willing to take on Big Finance. What is surprising is that she has the arrogance to think that voters will believe otherwise.

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  1. kimsarah

    She is pathological and represents everything that’s wrong with the Democratic Party.
    By the way, it’s rather obvious by now which audiences matter most to Hill and Bill — those who pay the highest speech fees.

  2. diptherio

    Hillary is shameless. That 2008 clip…unbelievable. “Home buyers who paid extra fees to avoid documenting their income should have known they were getting in over their heads.”

    And what of the bankers who allowed borrowers to pay extra fees to avoid documenting their income???? Astounding. That woman has some set of balls on her….

    1. mk

      Yes, what about those lenders/bankers who were selling these loans to the borrowers? As a real estate sales person working for a real estate sales and mortgage broker in 2006, I received training and was offered incentives to sell subprime loans to people with 700+ credit scores. I never sold any of those loans because I knew this was illegal. Looking back, seems like the loan brokers got the message that they could get away with these activities.

      I’ll never forget that picture of Henry Paulson and George Bush shaking hands after the big bank bailout passed. DISGUSTING!

    2. fresno dan

      We really need a new word to replace “astounding”
      One that encompasses a blatant falsehood, moral sanctimony, deflection of responsibility, chutzpah, defense of the indefensible, shameless, and….
      oh good grief, I’ll be here until tomorrow if I really tried to design a word that fully describes why that speech is so wrong!!!

      There really should be a contest to see who can most completely and accurately describe what is wrong with what Hillary says in that speech in the fewest words. It would be a great exercise for those who love language, because the Clintons lawyerly prevarication, erudition in dissembling, nuance in mendacity, and mastery of perfidy, make it a rich and complex exercise in using words to completely describe all the ways the Clintons can lie…..

      Just as a small example, I don’t know of a single English word (i.e., one word) that describes using the passage of time to rewrite history, or more accurately, using the passage of time to aggrandize oneself by misstating what one said at an earlier event.

      1. Olaf Lukk

        My humble suggestion: When someone has the gall to play on someone else’s gullibility, they are guilty of “gallibility”?
        Sorry. Sometimes I just can’t help myself.

  3. verifyfirst

    The reality of Hillary and Bill is far worse than what this article gets at…….lets see, here are Hillary’s speaking fees from 12 financial companies over one short time frame (recall she also prohibited reporters from attending these speeches):

    The connections of the Clinton’s to financial firms would probably take a book to fully document, especially if you include the vast sums of money donated to their so-called “foundation”. But here is a short overview of Bill’s deregulation of financial companies, without which the 2008/9 crash could not have happened. Familiar to NC readers no doubt, but you can pass it on.
    And for dessert, a little more about her funders…….

    Like I said, a book………and that is without even mentioning the destructive effects of NAFTA on ordinary people in both the U.S and Mexico.

    1. fresno dan

      I responded to Katness Everdeen on today’s main links page – she had a post very much like yours.

      And it occurred to me – – in the movie “Die Hard” the take over of the building by terrorists is a ruse to disguise the fact that they are common criminals there only for robbery.

      There is a point at which the Clinton’s are not gifting to become presidents, but they become presidents so that they can grift.

  4. deePreston

    I think we have all had enough lies for the rest of our lives!! Obama promised transparency, to close gitmo, to take action against the banks and to end the wars. He lied through his teeth. He allowed a “robosigning” settlement , which was just making forging documents legal. He has stolen our freedoms. Spied on all of us and allowed big banks to double down on derivatives. Hillary is also pathalogical and her husband ruined the banking system by deregulating them. Enough with all the lies!! I think many Americans are at a tipping point. Its called a revolution! Its beyond time.

        1. polecat

          rexl & Yata…… you dispute what deePreston said regarding Obama?….if so, state why………otherwise you’re just trolling….

          1. Yata

            otherwise you’re just trolling… That’s rich…and humorous. I think for myself and don’t respond well to ultimatums. I’ll just let you try and understand the issues for yourself for that trolling remark. : )

          2. Yata

            otherwise you’re just trolling…. That’s rich…and humorous. I don’t respond well to ultimatums So i’ll just let you figure out where that went off the tracks, and hope to be here for your aha moment.

            moderators: will this second try pass your critique?

      1. NotTimothyGeithner

        Do you understand how majorities work? The Democrats reauthorized the 60 vote gentlemen’s agreement called the filibuster. Obama never complained.

        Even A CA was passed without any GOP cooperation. Gee whiz! Is it possible Obama is just a disgrace?

  5. flora

    Thanks for the video. The effrontery of Clinton’s scolding tone toward home buyers – “it’s their fault, they should have known better” – instead of targeting the real crooks is over the top.

    1. Jim Haygood

      To paraphrase David Stockman on looking forward:

      ‘Corruption eruptions as far as the eye can see.’

      Hillary Milhous Rodham for president pro tempore!

    2. petal

      Good one, Lambert! Almost choked on my peas. Had nearly forgotten about that one. I should try it on my professor. Cheers.

      1. polecat

        I prefer to look back from time to time…..just to make sure i”m not getting anymore reamed then I already have!

  6. crittermom

    Hillary has always played to her audience. Time & again. That’s her “safe” agenda while running for office. Please everybody until elected. Tell ’em what they wanna hear.

    What concerns me are those women who intend to vote for her just because she’s a woman!
    They give the rest of our gender a bad name. It should be the best person to represent us citizens in making this country great again. Period.
    They would do more for our gender by facing facts, rather than blindly waving a feminist flag in a herd of sheeple whose vote is determined by gender alone.

    I remain flabbergasted by HRC’s answer about Wall St during one debate where she stated she was on Wall St following 9/11, blowing her own horn (she’s SO good at that) while evading the actual intent of the question. That was very telling. She went on forever blowing her tune, trying to mislead the audience away from the intent of the question so she wouldn’t have to ‘fess up to her strong ties to Wall St financially. If it weren’t so pathetic it would’ve been laughable.

    Lambert, while I want to look ahead to a more promising future, I believe it’s also necessary we look at the past, & facts, to help determine the person best able to represent us in the future.

    How do we request (demand!) each candidate respond to the proposals presented by the Bank Whistleblower’s Group in yesterday’s excellent article? That’s what’s needed, IMO. (Tho’ I suspect HRC would just go into her side-step dance while blowing her own horn & refuse to release all her answers, much like her emails).

    Thanks again for teaching me so much with your reporting. I love NC!

    1. Elizabeth Burton

      And there have been at least two bloggers I’m aware of who cried all over their keyboards about how everyone is being so unfair and mean to poor Hillary. The implication being “because she’s a girl,” because both were couched as protests that so many women weren’t rushing to support her.

      Probably among the same bunch now jumping all over Susan Sarandon for saying she doesn’t vote with her vagina. Apparently, it’s fine for them to use the word “c***” as a pejorative (which I was roundly abused for criticizing) but offensive for a Sanders supporter to suggest they’re voting based on gender and using synecdoche.

      1. NotTimothyGeithner

        It’s not about Hillary being a girl. It’s about justifying bad behavior and support of terrible Democrats. The whole “Hillary is a woman” thing is designed to prey on young women’s fear and quiet male Democratic critics who secretly hate women or some non sense.

        It’s no different than the Obots. Despite Bill’s framing as the first “black” President, his 1996 election and Gore’s 2000 election saw record low turnout. Democrats really pushed the voters not voting their interests during this period. The desire to paint Sanders as racist was born out of the knowledge that the Clintons might be beloved by the fraudulent black misleadership class but aren’t that well liked among African Americans.

        Young Obama supporters will stomp their feet and hold their breath if the bug guy is criticized. Camelot fantasy weirdos are just the weirdest though.

        1. crittermom

          I agree with you about the fact it should be about not justifying bad behavior, but I was lamenting the fact that for some (fools) it’s only about gender.

  7. Yata

    I went to the link of the transcript of her speech and found I was rather surprised at her understanding of the issues in the mortgage securities market. I had initially thought “zonkers! Mrs. Clinton could have written her own financial blog!” Until i looked through the NC archives and discovered NC had been laying this out a year prior to the aforementioned speech.

    How do we go about getting Mrs. Sheila Bair nominated, and how can i find that post by Alex Morfe..sesis(??)
    that basically lays out how the mortgage servicing industry works ?(great read)

  8. claudia kimball

    I think we need to be mindful of the past and the present while looking forward.
    So much of history is revised to accommodate power. In my small footprint life my experience
    with those people who would have some measure of power who say but we are here now and
    it is a waste of time to examine past actions we must keep moving on. These people are the
    ones who do not wish to examine there own actions or have others do so. The self examination
    is ridiculed as non productive. Though this happens in our busy ambitious culture in many small ways which seem personally insignificant, how can a clear constructive reality be forged
    when the foundation is not clear. We can’t truly move forward without acknowledging the past or we will carry it with us. The trick is to not get stuck in the past. I appreciate this post is necessary to inform the future.

  9. Keith

    I find it fascinating that you cut off the video just before she continues on to talk about homeowners who took out mortgages to purchase multiple houses in order to flip them for quick cash (you know, homeowners who bear responsibility) and then when she immediately proceeds on to allocate the blame to Wall Street for assisting in creating a system where people were unknowingly sold the toxic assets.

    Why is it, I wonder, that you did that?

    1. Yves Smith Post author

      I provided a link to the entire speech and discussed it at some length. There’s no taking this out of context.

      And had you bothered to look, you’d see I did not create that video.

      If you know anything about stated income loans, only a small percent were home flippers. Depicting people who took out stated income loans as home-flippers is ALSO a slur on borrowers, which in context she is doing. Some were people who were self employed and either could not document income or whose reported income for IRS purposes (which is what banks usually look at) is lower than what their income would have been on a normal salaried basis. For freelance writers, the difference can be easily 100%, for instance (I had a NYC friend lament over this issue). So her insinuation that everyone who took out a stated income loan was a crook is actually a continuation of the same borrower denigration, contrary to your effort to defend Hillary.

      In at least as many cases, the banks told the homeowner or buyer (more than half of subprime loans were “cash out refis” where the borrower was taking out more $ on a refi than on the older loan), the banks told the borrowers to sign blank documents and to let THEM fill out the income information.

      1. Davidraph

        I talked to a broker about a mortgage in 2006. And he told me he would have me take a stated income loan. I expressed surprise about the lack of documentation, and he told me “it’s not necessary anymore. We trust you to know what you can handle. That’s the only kind of loan we would put you in.”

      2. crittermom

        “Some were people who were self employed…”
        That was exactly my situation.
        Thanks, Yves, for defending us borrowers against those who still wish to believe it was our fault, despite all the proof otherwise.

  10. Hannah

    Just keep giving the GOP material to smear Hillary once she’s the nominee. Smear smear smear. What ever happened to Sanders’ vow to avoid negative campaigning? His Berniebro surrogates are doing the smearing for him.

    1. Yves Smith Post author

      Oh, this is the best you can do? Clinton would cement rule by oligarchs. I can’t help you if you don’t want to see that.

      It appears, as we’ve said before, that the Clinton campaign was trying to keep her wrapped in tissue paper. She does not hold up well to scrutiny. Your remarks confirm that. You fail to deny the truth of the charges against her because you can’t.

      And we don’t take marching orders from the Sanders campaign. I personally support Sanders primarily because I find Clinton so unacceptable. I have loathed the Clintons since the commodities trading bribe became public in the 1990s. I suspect this is true of many Hillary critics, that they are more “Hell, no Hillary” than Sanders enthusiasts.

      Finally, your comment suffers from the fallacy that Sanders voters would turn to Hillary in the general if Hillary gets the nomination. A lot, and I suspect a considerable majority, won’t.

    2. nippersdad

      What an utterly repellent comment.

      Trust me, the GOP already knows all of this stuff, the only reason it is not current amongst Democrats is because she has the Democratic Establishment covering her rear; Sanders has refused to dig into her dirty laundry because he is just a nice guy. Unfortunately for her, we don’t have to be nice. If it is true then it is not a smear/if it is true, it is fair game.

      Get used to it.

      You might start by informing yourself so that you can distinguish the difference between fact and falsehood. In addition to this one, here are a couple of articles that might just get you started.


      And here:

      There is a reason why she is disliked, and snide references to “BernieBros” will not bring back the dead and bankrupted that she has left in her wake.

  11. MaroonBulldog

    More evidence, if any were needed, that we live under a system in which the worst get to the top.

    Remember, its only 99% of politicians that make the other 1% look bad!

  12. cripes

    Shameless hussy.
    In case you missed it, “look forward, not back” is Obama’s infamous explanation why he failed to take any action to prosecute financial crimes. I’m sure some of the 2.2 million incarcerated appreciate the irony.

    I had a heated discussion with a bank vice president relative, where he flatly blamed subprime borrowers for crashing the world economy. I remarked how terrible it was they pulled the wool over the eyes of innocent bankers, designed complex financial instruments and hypothecated billions in mortgage debt into a 15 trillion dollar meltdown, pocketing the profits as millions of people lost their livelihoods.

    Oh, my bad, THAT WAS THE BANKERS.

    So stuck on this ridiciculous poor-bashing justification, we have hardly spoken a civil word in the eight years since. He has time to post things to his social media bashing food stamp recipients and homeless people. He’s a social “liberal” and thinks Obama walks on water. This is the kind of crap coming from diversity-addled, socially liberal, libertarian, humanitarian war-mongering, austerity-peddling coddled professional types pushing a Clinton regime. Revolting.

    Class warfare indeed.

    1. crittermom

      I’d like to meet your VP banker relative & show him the true meaning of underwater. There’s a lake just down the road from me…
      Thanks for sticking up for us victims, even among your relatives!

  13. Matt Carmody

    Everyone commenting here would really enjoy Doug Henwood’s recent book on the soulless candidate recently endorsed by the NYT “My Turn.”
    I personally would like a president whose reflection appears in a mirror.

  14. Anonymous

    Look how poor Bernie has to hold himself back from laughing when HRC says “I went to Wall Street in 2007 and told them to ‘cut it out,’ ‘quit foreclosing on homes.” The poor guy, she is just astonishing in her lies.

    Bernie 2016!

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