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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No, you are wrong; I blame Guy #1.
Guy #1, created the mess by breaking the public's back, and is rationalizing his behavior so he can go to sleep at night, by claiming, that Guy #2 did not say he could not break the public"s back. Additionally, Guy #1, does everything he can to make sure, that Guy #2. is weak and is unable to prevent Guy #1 from doing whatever he wants.
Guy #1 should be in Kansas, Nebraska and the Dakotas, but Guy #2 is to weak to do anyting about it.
Your description of how capitalism works is pathetic, and applies best to places like Somalia, not to an advanced society. Fortune needs to hire some people with sense.
No one was 'asleep at the switch'. They were wide awake. They didn't pull the switch because they were being paid not to. Greed may not be a crime but bribery still is in some countries(not this one). I blame Phil Gramm and Bill Clinton to name a few. I do not blame the 'system'. I blame Republicans and Democrats who were supposed to be cops on the beat, being PAID GOOD MONEY to be cops on the beat. I blame them for becoming part of the crime family. For being traitors to this country and for being financial terrorists. Pelosi, I'm lookin' at YOU!!!!
and Guy two is???
the Banking committee? Dodd et al (GOP members too); Bernake, Paulson? Greenspan etc etc
easy enough to say guy two but tell us who or how many guy twos there are, please
We had a regulatory structure that did its job but got in the way of all that greed from Guy #1. Then during 1980 - in what looks like a mild economic downturn by current standards - we elected this former movie star who insisted that Government was the Problem. He and his team proceeded to strip away the rules until they wiped them all out 9 or so years ago. The movie star's opponents did not do a great job of stopping this, but let us be clear, it was the movie star's team that year after year after year insisted there were too many regulations. They have been in charge big time recently and all the greed has finally come home to roost. And now one of the more mavericky members of the movie star's team wants to take over. That is chutzpah!
End of parable.
Question: Who is to blame for this dead girl here? #1: The guy who shot her? or #2: The cops?
Answer: both. Lots of people hold a share of blame in our current crisis. Just because regulation was lax does not exonerate the greedy, the corrupt, and the irresponsible who actually broke the economy. No one's sins are made white by standing next to some one who's sins are blacker.
Great example!
Or, in other words, deregulation is to blame.
Amen.
Unfortunately, you never actually SAID what you were saying, probably because deregulation (along with tax cuts) is like a religion to the conservatives who've been dictating money policy for 25 years.
"I blame Guy #2. Isn't it time we took him out behind the barn?"
The unrepentant Mr. Greenspan already retired and is out on his book tour. Can't touch him.
It's Bill's fault.
We know who they are, we are just powerless to change them. there are no rules for them, they will get to keep their jobs and pension plans , health benefits etc.
The system is corrupted, there is your enemy.
Dude, you're still buying the Gordon Gekko line and not seeing that film as the satire it was. Yes, Guy #2 deserves more blame, but it's long past time that those in Wall St. wake up and realize it is NOT, NOT, NOT their job to mindlessly eat all the pie they can in the shortest amount of time possible. In order to maximize lifetime pie consumption, one has to make sure to not stuff one's face so much that you end up puking like the scene from the film Stand By Me and covering the rest of the world in your foul vomit. It is NOT helpful to make excuses and say "bankers were just being bankers" or more broadly "capitalists were just being capitalists." It's essential that all parties learn lessons from being caught up in a very destructive bubble mania and learn how to think about systemic risk. The Guy 2 role can't solve everything.
Wow, great response. I couldn't have constructed a better one.
Phil Gramm and his crony John McCain, the dynamic duo of deregulation are responsible. They said the “free market” needs no regulation. Remember when John McCain wanted to do the same to social security, Medicare and healthcare?
The only problem with your logic is that you don't take the extra step and figure out who put those people in office. Yup, yup, that's us, the American people. We didn't keep an eye on it because it was making our 401ks, and other pension funds grow. We all played the game and must now pay the piper.
Any ideology always seems to get in the way of common sense, but you have to admit that ideology invariably succeeds in producing spectacular train wrecks. Whether the ideology is communist or neocon free market or Pol Pot's version is rather irrelevant.
Interesting idea. But not entirely accurate. Would regulation have helped? Sure? However, the larger problem is that the US ran some of the largest boom times expansionary monetary and fiscal policies in history. The excess money that was printed had to land up somehwhere. In the old days, it would go into inflations numbers - i.e. the cost of consumables. However, since the US doesn't make much of anything that's not where it all went. It went into assets. So, you had massive asset price inflation.
We've known about this bubble for four years. No one did anything. Blaming Wall Street is like giving away free money, and then blaming the people who took it. Regulation is the byword now, because the politicians need someone to blame and they won't blame themselves and they aren't willing to tell anyone that there are no free lunches.
Um, he isn't blaming Wall Street, he is blaming the politicians who did not regulate. Who let the train wreck happen.
He may not be blaming Wall Street, but a lot of us are. Where did all those consciences go?
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