Economic Mess Blamefest

Comments

• Charles Dean

  February 2009

  I blame the LIBERAL MEDIA!!!!
• sniglet

  February 2009 edited February 2009

  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.
  
  http://surkanstance.blogspot.com/2008/10/blame-little-people.html
• The_Tim

  February 2009

  Here's a chart that sortof backs up Sniglet's point:
  
  (click to enlarge)
  
  The idea of actually saving money has been on the decline since the mid '80s.
• perfectfire

  February 2009

  Charles Dean wrote:

  I blame the LIBERAL MEDIA!!!!

  Counterpoint: I blame conservative talkshows!!!!!!
• The_Tim

  February 2009

  perfectfire wrote:

  Charles Dean wrote:

  I blame the LIBERAL MEDIA!!!!

  Counterpoint: I blame conservative talkshows!!!!!!

  If the D's succeed in bringing back the Fairness Doctrine I'm totally going to march down to 710 KIRO or 570 KVI and demand that they give me a show to promote Jedi Politics. I just think it's about time we had some balance on the airwaves. The Jedi voice has been suppressed long enough.
• jon

  February 2009

  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

  February 2009

  sniglet wrote:

  
  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.

  
  I would also add that CEOs do actually have a Legal obligation to maximize profits, it's called Fiduciary Responsibility. CEOs, and, I believe, corporate board members, can be sued in civil court for not maximizing performance for stockholders (ie, the owners of the company).
  
  I do agree with Sniglet that folks who behaved irresponsibly by not living within their means have nobody but themselves to blame for their current situation. Of course, as always, it is the responsible people who pay the price...
• Charles Dean

  February 2009

  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

  February 2009

  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

  February 2009

  dls wrote:

  I would also add that CEOs do actually have a Legal obligation to maximize profits, it's called Fiduciary Responsibility. CEOs, and, I believe, corporate board members, can be sued in civil court for not maximizing performance for stockholders (ie, the owners of the company).

  
  Maybe I'm old fashioned, but I believe the best way to maximize profits is to keep your company in business. The banks deserve all the blame they got as market makers. Sniglet's right that borrowers and lenders deserve more blame, but let's not go easy on any of the bad boys.