The origin of the subprime mortgage blowout that sparked the financial crisis of 2008 and 2009 goes back to the Clinton administration, says former Sen. Phil Gramm, R-Texas.

In 1992, then-presidential candidate Bill Clinton recommended using private pension funds to "'invest' in government priorities, such as affordable housing, to 'generate long-term, broad-based economic benefits,'" Gramm, now senior partner at US Policy Metrics, and Mike Solon, a partner at US Policy Metrics, write in The Wall Street Journal.

"Seldom has such a radical proposal been so ignored during a campaign only to later lead to such devastating consequences."

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The idea didn't get very far when the Clinton administration took office, "but it succeeded in winning the war by drafting Fannie Mae, Freddie Mac and the commercial banking system into the affordable-housing effort," Gramm and Solon say.

"Bank regulators began to pressure banks to make subprime loans."

As for Fannie and Freddie, by 2008, when the two enterprises collapsed, they were required to devote 56 percent of their mortgage purchases to affordable-housing loans, the duo contends

"By 2008, roughly half of all outstanding mortgages in America were high-risk loans," setting the stage for the meltdown to come, they note.

"The people who destroyed lending standards by driving subprime lending blamed banks, greed and deregulation for causing the financial crisis. But a review of the banking laws adopted since 1980 reveals that not one single safety and soundness measure was repealed," Gramm and Solon state.

To be sure, the housing market has now rebounded with vigor. The S&P/Case-Shiller index of home prices soared 12.2 percent in the year ended in May, marking the largest 12-month gain since March 2006.

"We continue to look forward to upward momentum" in the housing market, Anika Khan, a senior economist at Wells Fargo Securities, tells Bloomberg. "We still have historically low inventory levels."

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