Clinton signed bill allowing Credit-default Swaps

Credit Default Swaps were invented in 1997 by a team working for JPMorgan Chase[7][8][9]. They were designed to shift the risk of default to a third party, and were therefore less punitive in terms of regulatory capital.[10]

I often wondered where CDSs originateden.wikipedia.org...

rest of quote:

Credit Default Swaps became largely exempt from regulation by the SEC and the CFTC with the Commodity Futures Modernization Act of 2000, which was also responsible for the Enron loophole. President Clinton signed the bill into Public Law (106-554) on December 21, 2000.

This link is obviously biased, but it gives a good explanation of the deregulations that largely contributed to this mess: Making Sense of the Credit Debacle.

I think that the underlying problem is cultural. As a country, we bought into this borrow-and-spend mentality, never really stopping to realize that credit=debt. I read that Iceland was spending money like they were the UK, the UK was spending money like they were the USA, and the USA was spending money they were the entire world. When credit gets this out of hand, it's easy to see how things were destined to blow up.

There's plenty of blame to go around, and when historians start writing about this meltdown, Clinton is going to get his share of criticism.