Filed under: Politics, Housing, Recession, Financial Crisis
Washington Post Business Columnist Steven Pearlstein does not ‘hold it all in,’ as they state, regarding who he thinks is most to blame for the financial crisis.
Pearlstein cites the ineptitude of Wall Street and the nation’s financial regulators. The crisis would have occurred whether Lehman Brothers was saved or not, because bad debt had overwhelmed the global financial system. A government intervention was inevitable, essential, and an act of leadership, in Pearlstein’s view.
Conversely, Wall Street’s top executives have shown little leadership, if any, he stated. Their silence and invisibility throughout the crisis “attests to their moral and political bankruptcy,” Pearlstein said, a perfect match for the financial bankruptcy they caused for investors, creditors, and customers.
Further, Pearlstein is particularly angered by Wall Street’s top executives unwillingness to commit to a plan to enable borrowers to refinance mortgages into government guaranteed mortgages set at 85% of current market value of the property, and at the executives’ utter lack of comment before the cameras, particularly regarding credit lines to businesses.
Political & Economic Analysis: Columnist Pearlstein clearly lays the blame for the financial crisis at the feet of Wall Street’s top officials. Still, the mortgage process — and the failure of a substantial portion of the subprime/Alt-A mortgage market — involved many players: bank executives/lenders, mortgage brokers, appraisers, securitization specialists, ratings agencies, and borrowers.
That’s why, after the crisis has ended, the new U.S. Congress and President have to dispassionately review the entire mortgage process and create a system that makes home ownership accessible, but that does not lead to irresponsible, reckless lending habits.
Keeping in mind that Congress is not apt to approve a policy the public does not support, it makes sense to find out what taxpayers think.
In your view, who is most to blame for the financial crisis?
a) top executives and banks
b) borrowers
c) mortgage brokers
d) home appraisers
e) securitization specialists
f) ratings agencies
g) None of the above / something else.
Let us know what you think.
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