Former President Bill Clinton says any federal bailout for troubled banks should include protections to help homeowners keep their houses and renegotiate their failing mortgages.
The government should also take equity stakes in the troubled financial institutions and earn interest on the lifeline loans to help recoup taxpayers’ funds, Clinton said.
“You want us to put up this $700 billion? Here are the conditions. Number one there has to be a moratorium on home mortgage foreclosures,” Clinton said Tuesday in an interview on Comedy Central’s "The Daily Show with Jon Stewart."
“Every single one of these mortgages should be reviewed. If you can write them down a little so somebody can make their payments, that will cost the taxpayers less and hurt the economy less than a foreclosure," the former president said.
“That’s what we did during the Depression and it actually made money for the taxpayers.”
While Clinton took issue with the current version of the bailout being pitched on Capitol Hill, he said he did like the way the government handled its rescue of beleaguered insurance giant AIG last week.
“When they helped AIG, they took an 80-percent ownership share, they loaned the money at a very high interest rate, and they are going to make a profit,” Clinton said. “If you want to take all our money as taxpayers and help these [businesses] get through a rough spot, fine… but taxpayers have to get a piece of the upside.”
Clinton blamed the economic meltdown on a housing bubble that mirrored the technology bubble he witnessed during his own administration. As in the "Dot.com" bubble, the former president said both investors and the country would have been better off looking for more worthwhile and diversified places to put their money during the overheated housing boom.
“All this money was out there and it all went into housing and construction, so we had to keep finding funny ways to have more houses like these sub-prime mortgages and derivatives,” said Clinton. “What if we put a lot of this money into solar energy, into wind energy, into hybrid vehicles, making all our cities as energy efficient as possible? We would have created millions of jobs, raised income, and had the revenues to provide health care to everyone."
Clinton took the opportunity on Stewart’s comedy show to connect the financial crisis to the election and plug Obama as the candidate best suited to fixing the mess in Washington and on Wall Street.
“If you vote for Senator Obama and Senator Biden, there is no question you get better economic results, broader shared prosperity, fewer of these headache problems, and a better position in the world,” Clinton told Stewart. “This is why this presidential election is important, folks. Not to find evildoers, but growth.
“That's the ground to fight the election. The purpose is not for people to pass some emotional hurdle tests,” Clinton said. “This is about winning an election that can change the future of the country by giving it back to the American people.”
But, Clinton added that Obama’s dedicated — often gushing — devotees cannot alone secure the oval office for the Democratic candidate.
“I’m glad [Obama] has people that love him so much, but those are not the people that hold this election,” Clinton said. “The people that hold the election are the people who think he's on their side and think that he loves them. In other words, he still needs to get the votes of the people that voted for Hillary, or the independents who didn't even vote, but who know the country is off on the wrong direction.”
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