View From Table 9

October 6, 2008

Pin the Tail on the Other Guy

Probably one of the most interesting side-show phenomenon of this whole Economic Meltdown Mess is the intense scrambling by many to pin the blame on somebody else (particularly someone who is on the ‘other side’). Depending on whom you hear from it’s the fault of:

1. President George W. Bush

2. Former President Bill Clinton

3. Wall Street Brokers

4. Alan Greenspan/Henry Brennacke/Henry Paulson

5. Fannie Mae and Freddie Mac

6. Congress

7. Banks

8. Countrywide

9. People who borrowed more than they can afford

10. Real Estate Marketers

11. Liberals

12. Conservatives

and so on…

What’s interesting is that there is no one smoking gun – no Ken Lay for Enron as the Bad Guy, no Michael Milikin for Junk Bonds, no Osama Bin Laden for 9/11 or Saddam Hussein for WMDs. No one whom everyone can drag out into the Village Square and throw tomatoes at because ITS THEIR FAULT WE’RE IN THIS MESS.

This would be especially convenient for those who are running for office, as having a scapegoat would conveniently absolve them of any responsibility.

The truth here is that we are all responsible –

from the person who borrowed way more than they knew somewhere in their heart they could not afford but did so because the bank said it was OK to the bank who lent that person money even though they knew in their heart that this loan would not be paid out because hey the computer models said it was OK and besides prices are going up up up

to the reseller who bundled loans and labeled them improperly even though they knew in their hearts that this was not good because hey, history says that most of these loans won’t go bad to the rating entity who labeled these loans without thoroughly checking them to the purchaser who knew in their hearts these were too complex to verify but did so because they didn’t want to be ‘left behind’

to the Wall street Broker who sold these bundles knowing in their heart they were not as good as they were purported to be to the investor who knew in their hearts that the market was way, way, overheated and based on no real wage growth but bought these securities anyway because they couldn’t resist the profits and hey Moodys said it was OK

to Congress and the President who knew in their hearts that this market buildup was not based on real sustainable growth but allowed it anyway, even to the point that they pressured lenders and purchasers of mortgages (that would be the Banks and Fannie/Freddie) to make those loans and buy them to sustain this ‘growth’ because they and their rich constituents were making money and they desperately did not want the house of cards to fall ‘on their watch’ and because ideologically they believed that more regulation was bad and the market corrects itself always.

The truth is we are all to blame, even those who did not gorge themselves on the feast, because we are all part of the system that created this. Failure to act does not absolve oneself of responsibility to act.

You see, we really can’t say we didn’t know what was going on. At least five years ago we knew, in our hearts, that something was wrong with our economy. When banks offered us loans without reason or rationality. When housing prices when insane. When our paychecks stopped getting bigger but we could still ‘afford’ so much thanks to mortgages and equity loans and credit cards.

The truth is that the “average” American trusted our leadership, the Really Smart People Whom We Elected, to take care of us, to protect us, and to help us live better lives. After all, they saved us in the Great Depression, right? They know best so we should let them Do Their Jobs.

Those Really Smart People Whom We Elected took that trust in their large, comforting hands, wrapped it in the American Flag and the rhetoric of good times, God, the American Dream and Patriotism, and then they promptly screwed us all.

Fool me once, shame on you. Fool me twice, shame on me.

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