Who's To Blame?
I don't have a lot of time this morning, and I'm getting pretty sick of all attempts to complexify this question, so I'll lay it out for you right here.
Who's to blame for this incredible mess? It's really clear.
No, it's not Wall Street. Wall Street is there to work within whatever rules there are to make people who invest in stocks and other instruments (and pay their broker fees) as much money as possible, with billions left over for Itself.
No, it's not Greedy People. Captialism is all about rewarding the greedy. If Greedy were a crime, they'd have to set aside Kansas, Nebraska and the Dakotas to hold all the felons.
No, it's not the Banks who pressured the Feds to change the rules, jobbed the system and did whatever they could to build double-digit growth into a machine set up to operate in the low single digits. They were playing by the rules they were allowed to set up for themselves, and, more importantly, by the demented rules of the Street.
And no, it's not the fat cats who profited, or the weasels who sold the same bridge over and over again, or even the realtors who squeezed every last bit of juice out of the blood orange that was offered to them. These are all shallow, self-interested, slightly sleazy, ambitious, avaricious, mendacious forces that are DESIGNED to do what they did: Get away with whatever they could. Make the most money. Figure out rationalizations to make it all sound good. So you can't blame the intellectual courtesans in academia, the press or the research departments of now defunct institutions who helped them do that either, no matter how tempting it is to do so.
It's the guys who were supposed to watch this sorry bunch and prevent them from taking over the funny farm. They're the ones to blame. How simple do I have to make it?
Guy #1's job is to eat as many pies as he can before he dies. Guy #2 is hired to make sure that everybody gets his or her fair share and plays by the apple-pie rules. If Guy #1 and his pals get all the pies, he's just doing his job. It's Guy #2 who isn't.
So I'm looking at Guy #2, who changed all the rules when Guy #1 asked him to. Who didn't enforce the few, tattered rules that remained. Who, over the course of the last couple of decades, never learned the most simple two-letter word in the English language, one that translates pretty well into virtually any global tongue. That word is NO. Who, in a very real sense, simply went missing. Who got gone.
The system is built to reward the fast, the greedy, the sharp, the amoral. In a totally free market, it is they, unencumbered by restraint, who do what's necessary to reach their objectives. That's why we have laws and regulations and people to manage them -- not to destroy freedom, but to make it possible in a world that is not set up to truly establish it.
I blame Guy #2. Isn't it time we took him out behind the barn?
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In my opinion, the closest person to Guy #2 is Allan Greenspan. Reading his book makes it very clear that he saw the growth of derivatives and what is now "toxic paper" as a great accomplishment.
Agreed and then add in Phil Gramm and John McCain and you have the guilty parties.
What are the issues in this country? We the citiizens of the USA in the past several weeks have been lead down the path of distraction. Nero played the violin while Rome burned. Perhaps in the next twenty five days one of our candidates will give the America people the respect that we deserve. We as citizens and taxpayers need a leader that will give MAIN STREET a voice in our government and above all the tools to be employed and make a comfortable salary. Yes, Main Street could not pay their mortgage, Yes Wall street is infested with cread. Do we dare ask why Main Street could not pay their mortgage?
There will always be Guy #1 who want to push the limits or even break the rules/laws. The fact that Guy #1 sends lobbyists to convince the lawmakers to deregulate the rules so much that Guy #2 finds what to be legal, although it was illegal before, is the big problem. Regulators may have been somewhat lax to what Wall Street and Banks were doing, but the regulations have been so watered down, it's become almiost a free for all. Why are banks required to focus so much on BSA rules and USA Patriot Act, and not on the safeness and soundness of the institution itself?
Gil, can I call you Gil? Nice try. The rats when thataway. If you hurry, they might let you into their secret burrow for having embraced the pie eating philosophy with such dedication and for so long. Good luck.
Ok, but who is this guy #2? Is it the ex-movie star who set the stage for big cov'ment is bad? Who told us rising tides raise all vessels. Actually, a rising tide raises the row boats first before the yachts. Or is it the congress passing reform to do away with Glass-Steagall? Or the administration with the deep belief in avoiding any kind of regulatory encumbrance to big business? Or is it the voters who bought these messages and made them their theology?
Sounds a lot like "victim mentality". You can't blame the guy for shooting people, he was bullied. You can't blame poor people for stealing. How whiny and with poor character is this guy?
I remember when I was looking to refi a few years a go. I have great credit. I was getting quotes for the usual 5.5-6% . I was cold calling mortgage companies and banks. I called citifinancial. They asked for all my my important info over the phone- i was getting uncomfortable with that-. They were not at all friendly, and they came up with a rate of 9%!! Using the same info any other bank or mortgage co. used. So , IMO. there was a lot of shady crap going on. What if normal people were told to call citifinancial because that was the only place they could get approved for a loan? If my rating was over 800, what rate would would a 700 get?
Granted, it proves that regulation is necessary, but, I also fault business people who screwed over people. I guess they'll get theirs in the afterlife.
LOL loved this. But guy #2 was listening (if you believe Naomi Klien) Milton Friedman and those fab economists. Oh well. I blame him too. LOL
The greedy owns the means to prosperity and the organs to communicate their values to the masses. the masses have only what they hear. the greedy has effectively compartmentalized elections and kept them confined to the states and local jurisdictions where the left hand and right hand cannot communicate. this makes for a cumbersome system to manage where those who should be leading don't have the mechanisms by which to do so. Take one look at Fox news and you will see that we have long since lost our way because the ability to lead has been put in the hands of the fox. the system is ineffectual, Ergo, we need a new system. our economic system of capitalism is indisputably effective in raising capital but it is also extremely destructive of an orderly, cooperative society because of the cancer of greed growing within. We need a socialistic capitalism where the first priority of capitalism is the society and only after the society is sound, can the greedy be allowed to take managed risks. if we don't develop this solution to a workable system, we are not long from our destruction. The poor will become fodder for revolutionaries armed with dirty nukes and it will only be a matter of time. OUr systems need to change, NOW!
people who are acting like this is "congress" or "bipartisan" need to read the NY Times explaining that, not coincidentally, it was HENRY PAULSON who went to the 2004 (Bush) SEC and demanded that Goldman Sachs and the other investment banks be allowed to stop holding billions of dollars in "reserves" to hedge against bad investments, and instead be allowed to risk their entire "insurance policy" on shady mortgage-backed securities. Bush admin gave a resounding YES, Goldman and others cheated lied and stole until all the money was gone, Paulson failed upwards into the Treasury Secretary job, and is now repeating the process of enriching the bankers and destroying the lives of Americans:
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this is 100% Bush/Paulson. not accidental. an intentional pyramid scheme with bailout built in. evil, corrupt and all done without voter or investor input. it's called fascism, you may have heard of it?
It's all very simple. People will get away with whatever you let them. If you create a loophole in the tax code that allows you to deduct your entire salary, would you do it? Of course. Would you factor in that everyone else will do it too? No, because you're really only concerned about yourself, not what everyone else is doing. Republicans love to talk about free markets, but what they fail to grasp is that some amount of regulation is always needed to ensure the overall health of the financial system. Businesses are just like people. They'll get away with whatever the law lets them. Take away the rules that keep them under control and they'll run wild. And now, we've seen the result. Phil "deregulation" Gramm has managed to bring about a global financial crisis. I hope history remembers him for that singular achievement.
We haven't evolved yet as a species to see that there is more potential to humans than eating as much pie as you can get your hands on. Guy #1 - and he *is* a GUY - is a neaderthal who only knows baseness, greed, selfishness. Guess what, he is still being fed his pie.
Why is he permitted to act like a child, and require a "guy #2" - yes, another GUY - to stop him before he hurts everyone else? because he is unevolved, and does not understand yet how to control himself. We require protection from these people. Except that Guy #2 is just like him.
Evolution can take a very long time. So, we may as well keep baking. Or, not. Some of us got out of the bakery business a long long time ago.
Mr. Bing is right; they don't call it carnivorous capitalism for nothing. When business makes lots of money, they funnel larger portions of it towards political campaigns so they can have their way, more and more often. Soon, the guy #2 is owned by guy #1 and guy #1 gets away with murder. You want to keep this from happening every time there is a boom economy (you know, when business gets rich enough to buy politicians), you've got to disconnect business money from politics and, I'd argue, fundamentally change some assumptions about what is fair and sustainable. What is the purpose of business and industry? Enrichment for the few or life-support system for the many?
Absolutely right, Mr. Bing. Greed is one of the worst vices there is; government should be regulating it.
From Thomas Paine's Common Sense:
Some writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins. Society is produced by our wants, and government by our wickedness; the former promotes our Positively by uniting our affections, the latter Negatively by restraining our vices. The one encourages intercourse, the other creates distinctions. The first a patron, the last a punisher.
Clearly,it was the fault of those who pushed for deregulation and ignored the lessons of the 1929 stock market crash. The removal of the barriors does not,however, exonerate those crooks who invented Cerdit Default Swaps to attract investors to high risk securities. Securities that were sold worldwide bundled with these Credit Default Swaps, I might add. Anybody with a brain could have seen the problem with issuing guarantees, unbacked by any reserve funds, that a security would not lose value. I say we go after Phil Gramm,the GOP, and then go after the wise guys who lobbied to make Credit Default Swaps unregulated.
Too Right!
It seems that the rating companies are getting a free pass on this one. Fitch, Standard & Poor and Moodys have a lot to answer for. But apparently they did some sort of deal with the FBI.
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