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Wall Street Apologists Need to Acknowledge the Truth

02/02/2011 04:47 pm 16:47:13 | Updated May 25, 2011

The recently released Financial Crisis Inquiry Report makes it clear that there is enough blame to go around for the financial collapse of 2008. Wall Street hustlers looking to make quick bucks made huge bets on the housing bubble that ultimately came crashing down, the government not wanting to stop the good times did little to regulate Wall Street, the public bought into the dream and Fannie Mae and Freddie Mac too eagerly chased business. However, many on the right see no fault on Wall Street and blame the whole thing on Fannie and Freddie. How narrow-minded can they be?

The chief man with blinders on appears to be Peter Wallison of the American Enterprise Institute. He blames the whole crisis on Fannie and Freddie's policies to buy more debt and spur homeownership. The Wall Streeters, he must believe, were just taking advantage of a market opportunity by doing all of their machinations to make more money. What makes this view even more incredible is that Mr. Wallison was on the Financial Crisis Inquiry Commisssion so he had access to the facts, which say otherwise. But what do facts matter in the face of ideology? He must believe Wall Streeters have no free will but slavishly follow market opportunities. Frankly, I think coming up with the creative financial instruments they did, takes some initiative by the financial geniuses on Wall Street. One would think they would also be smart enough to analyze the downside of the deal.

But isn't this the problem. No one wants to look at the downside when things are good and money is easy. Why question it? Like many did not question Bernie Madoff, they did not question Fannie and Freddie's policies and whether the housing market would go down. Instead taking some safe investments they continued to make bigger and bigger bets on housing. This is not Fannie and Freddie's fault but Wall Street's. Those that continue to apologize for Wall Street must realize this.