...but not really. I'm doing it a bit differently, because truthfully, I don't believe ANYBODY (at least from what I read about) has ever pointed the finger at the right source. And I really am tired of both parties trying to blame the other (although this blame game is played almost exclusively by the Democrats; watching CNN on this today in a hospital waiting room made me want to throw up - perhaps they would have admitted me, too).
First of all, THIS IS NOT POLITICAL!!! Let me be clear about that. This is not the fault of politics, nor politicians, nor political policies.
Although, that argument could effectively be made. For example, according to an October 3, 2008 article in the Wall Street Journal,
Beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low and moderate income borrowers. For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target -- 42% of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50% in 2000 and 52% in 2005. For 1996, HUD required that 12% of all mortgage purchases by Fannie and Freddie be "special affordable" loans, typically to borrowers with income less than 60% of their area's median income.
So... the argument could effectively be made that it WAS political policies that led to the current crisis, but I'm not going to go there. Instead, I'm going to point the finger right at the very thing that caused our Congress to act in such a manner:
FINANCIAL CONSUMERS!!! That's right, when pointing fingers at who/what caused the current fiscal crisis, I want us ALL (including myself) to look in the mirror. It was US, we the people, we who consumed financial products, who drove these policies, and demanded such things. We wanted more home than we could afford. We wanted even high risk borrowers to be able to afford homes. And then we wanted to fill that more-home-than-we-could afford "estate" with high definition televisions, the fanciest furniture, and so on. Oh... and don't forget the Lexus in the driveway; we had to have that, too!
So we demanded more home than we could afford, and more things than we could pay cash for. And we demanded the financial instruments to meet these "needs."
All the market did was provide what we were demanding. So it wasn't the greed of Wall Street, the greed of bankers, the greed of politicians... it was CONSUMER GREED.
Until we as consumers recognize it and do something about it, no amount of "bailout" will ever permanently fix this problem. Neither party has the courage to admit that it's OUR fault we're in this mess, so I will.
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Though, I don't hold the politicians or companies blameless, I do agree. This is mostly the fault of the American Consumer. However, political policies written to help win elections (for both parties) did contribute to facilitating the excess greed. I think that in addition to the "live within your means" lesson that is taken from this, we should also look more closely at our political system. I've heard that the short term reward system on Wall Street is partially to blame for this. Execs are rewarded with large bonuses for high short term growth, so they push into riskier areas (goes back to greed) and didn't diversify. This is a bad long term strategy, but for a short term cut and run, it works great. I would say the same is true for politics. Our politicians want to be relected every 2-6 years so they will put long term common sense aside and push through measure that look good in the short term. Look at social security, it's going to be a painful fix, but no one wants to lose their job by being the one brave enough to pass the fix. So it gets worse as it's pushed off and off for the short term happiness of their consituents. This situation is similar. A lot of people pushed for the subprime loans despite warnings because it looked good in the short term (houses for poor people). No one wants to take credit for that now as the longer term results crop up. That's just my rant though...
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