Economic Mess Blamefest

[The Tim]

Okay so it looks like people want to talk about who is to blame politically for the economic mess we find ourselves in today.

Personally, I think this mess has been building for about 20 years, which covers presidents and congresses of both parties pretty equally. The problem as I see it crosses political lines. Greed is bipartisan, so to speak.

Anyway, I created this thread so people could just get it out of their system. Let's hear it. Who do you blame for the mess, and why?

[Charles Dean]

I blame the LIBERAL MEDIA!!!!

[sniglet]

I blame society at large. I think it is innacurate to put all the blame on Wall Street, or even government officials and regulators. Society as a whole had become bullish, and was willing to throw caution to the wind in a massive credit boom.

Can you blame an appraiser for using overly optimistic assumptions in their estimates when they would have lost their job if they didn't (i.e. no one would bring them business if they couldn't meet the numbers)? Can you blame brokers for giving loans to people who couldn't afford them when there were investors snapping up real-estate securities who really didn't care about the quality of the borrowers in the underlying mortgages?

I had countless conversations with relatives and colleagues over the last decade where people would brag about how rich they were getting as their homes appreciated, and excoriating me for not buying since "prices only go up", and that my notions of trying to keep a small debt load were just silly. If anything, I have MORE sympathy for a Wall Street executive who presided over the collapse of her institution than I do for the home owner who over-extended himself. The Wall Street executive can legitimately say they would have been fired (by shareholders) if they hadn't stepped on the gravy train of fabulous profits (while it lasted). But there was no gun to the head of any individual who opted to buy some over-priced piece of suburbia by lying about their income on a mortgage application. Renting was ALWAYS a good (and affordable) option.

By the way, I have a blog posting about where I place the blame.

[The Tim]

Here's a chart that sortof backs up Sniglet's point:



The idea of actually saving money has been on the decline since the mid '80s.

[perfectfire]

[The Tim]

[jon]

Great comments on that politico link. I especially like creating a position to oversee the fairness doctrine, to be called the Minister of Truth.

[dls]

[Charles Dean]

This Time article from about a month ago I think sums it up pretty nicely: http://www.time.com/time/specials/packa ... 50,00.html

It's pretty even handed I think.

[explorer]

Besdies Singlet's points, you have to ultmately go to the Government regulators who allowed those CDO's and credit defalut swap's to operate outside of the regulations, and not to mark to market in the first place. They were fully aware of what was going on. Then throw in the ratings agencies who were fueling the fire along with the way too lax credit to leverage these things.

But Nooooo.... This was sold as something that had multiple backups, no worries, and no one challenged the fact that this resembled a Ponzi scheme until losses started to occur. This is not a matter of hindsight, but simple foresight about putting so much into dealing in leveraged risk into a structure that no one could be primarily held accountable for.

Complacency is FAR more dangerous than the acts themselves. The buck stops with the people in charge, the Fudicaries in the Federal Government.

Sadly with a new adminstration, not much has yet changed, and it's trending worse.

[rose-colored-coolaid]