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Don't Blame Canada
by Caitlin Roman
Jul 9 2008
Jul 9 2008
Blame Texas, Congress, or the American people. Readers respond to our "Who Killed the Economy?" feature.
Who Killed the Economy?
Was it Gentle Ben Bernanke? Or Jimmy Cayne? Play the Portfolio.com brackets and pick your villain. See All Video & Multimedia
Who killed the economy? Point fingers. Assess blame. Round up the posse. Read More
Two weeks ago, Portfolio.com posed a simple question with a not-so-simple answer: Who killed the economy? We suggested a few possible culprits and introduced an interactive bracket in which Ben Bernanke faced off against OPEC and Hank Paulson took on President Bush. And then we opened the floor to readers, many of whom said we had left off some other probable suspects, including Congress, the American people—even Texas. Of the more than 130 comments on Portfolio.com and over 4,000 on Yahoo, many took on the legislature for failing to push for alternative energy technologies and higher gas-mileage standards that would reduce costs. Others thought we had met the enemy and it was us. We overspent, built up personal debt, abdicated personal responsibility, and now we are paying the price, end of story. Additional candidates included the media, U.S. monetary policy over the past century, and Big Oil—but the "whodunit" remains unsolved.
Below, an edited sampling of some of the most insightful and provocative comments on the Portfolio.com and Yahoo websites.
Whose responsibility is it to ensure that people don't borrow more than they can afford? The government's, the bank's, or the borrower's? Unless we want a controlling-nanny state, it's clearly the borrower's responsibility. The government has a duty to ensure that the lender provides clear and full disclosure of the transaction, including risk, but it ends there.
--by Yahoo
There are a number of people to blame but I think Congress tops the list...and they are not even on your list. Think about why we do not provide more of our own oil or gas, why we do not have more nuclear power, why our cars do not get better mileage, and why the price of food has gone up so much. They are a major cause of all of that.
--by mike
The Sheeple who live where the United States used to be:
1. Trying to borrow themselves into prosperity.
2. Sucking all possible equity out of their homes to buy S.U.V.'s and big-screen HDTVs.
3. Expecting a bailout when the foolishness of their behavior catches up with them.
--by Koozarian2000
I blame it entirely on the loose monetary policy that Greenspan championed, from bailing out L.T.C.M. in 1998 to the bailout of Bear Stearns. If there is one thing that he set the tone for, it is making the Fed clean up the mess of the investment banks. Greenspan has been more fond of Wall Street than Main Street.
--by Austin
Consumers are to blame. They overspent (credit-card debt); they took out hefty mortgages, but with a little math calculation these consumers would have realized that a $350,000 first mortgage with a monthly payment of $500 did not wash. They also bought S.U.V.'s without thinking about (1) the turmoil in the Middle East, (2) more people driving, and (3) the fact that with limited oil exploration, the price of gasoline would explode upward.
--by AlanLester
The real culprits are: F.D.R. and Nixon, who serially eliminated the gold standard. This economic mess (which is just starting, BTW) was 80 years in the making. The abandonment of gold-backed currency allowed the Vietnam War, the Great Society welfare spending (and the federal debt in general), the exponentially grown trade deficits with the Middle East and China, and even personal (credit-card and mortgage) indebtedness. And now...we will pay the piper.
--by dr.shannon
Texas killed our economy. It is the greed and arrogance of the Big Oil executives that have kept our country "addicted to oil." The U.S.A. should have led the world to a renewable-energy-powered economy 30 years ago. Had we done that, we would not be fighting energy resource wars or paying for gas at all. The technology has been here for years. It has been the will to move forward and the leadership that has been lacking.
--by BaronVonRichter
Where is the block for all the dumb-ass people who were too stupid to do basic math and consumed their way into oblivion? Time to put the blame back where it belongs—on the guilty.
--by Diogenes
I think that a lot of people are to blame. We can start at the bottom of the list with all the individuals out there brokering mortgages who have no business education, no ethical standards, no certification, and fat commissions as incentive to broker deals between lenders and people who can't afford a flat-rate, fixed-term mortgage.
Then I blame lending institutions who come up with these mortgage plans that no person in their right mind would ever consider agreeing to in the first place, so that people could "get in and get out" in a short period when the market was hot so they would accumulate enough cash on the sale to use as a down payment on the home they really wanted to buy with a flat-rate, fixed-term loan. Entirely too many people signed on to these kinds of mortgages without realizing that these notes were NEVER meant to be long-term loans—and shame on the brokers who did NOT tell them this.
Then I blame investment houses with fund managers who bought all this bad paper, bundled it up, and sold it to both foreign investment houses and foreign banks—realizing a nice profit for their fund and for their investors (and pocketing their fat commissions, of course), all the while knowing that eventually this paper was going to "go bad" and negatively impact economies around the world. If people think that America isn't liked because of the war, they should read what people around the world think of our investment companies bringing down their economies and collapsing their banks. Funny how the American media isn't touching that story. I blame the American media.
I don't blame Alan Greenspan or Ben Bernanke. Their job at the Fed was/is to keep money flowing in a way that stimulates business growth in America and keeps the U.S. growing and competitive in the world marketplace. They have done that.
I blame Congress for passing bad banking laws. For eliminating the usury laws and letting the credit industry in general write their own ticket.
--by OaklandWoman
Bush and OPEC. Didn't help that they were in bed together.
--by stang
You forgot the media. They created a relentless drumbeat of negative stories on the evening news and in the print media. It almost seemed like they wanted a recession because of their partisan political beliefs.
--by Red
I blame Hollywood. When I was a child, the popular television shows did not show working-class people owning a large home, two cars, TVs in every room, and every gadget that money could buy. The only "homeowners" in television shows when I was a kid were professional people. And the families stress the importance of saving money, being thrifty, and going to school.
Now Hollywood depicts lower and working class families as having all the "toys" of life—which they can't possibly afford. They grow up thinking that is what they are entitled to have. And they browbeat their parents into buying them things they can't afford just so they will shut up.
--by BlameGreed
--by Diogenes
I think that a lot of people are to blame. We can start at the bottom of the list with all the individuals out there brokering mortgages who have no business education, no ethical standards, no certification, and fat commissions as incentive to broker deals between lenders and people who can't afford a flat-rate, fixed-term mortgage.
Then I blame lending institutions who come up with these mortgage plans that no person in their right mind would ever consider agreeing to in the first place, so that people could "get in and get out" in a short period when the market was hot so they would accumulate enough cash on the sale to use as a down payment on the home they really wanted to buy with a flat-rate, fixed-term loan. Entirely too many people signed on to these kinds of mortgages without realizing that these notes were NEVER meant to be long-term loans—and shame on the brokers who did NOT tell them this.
Then I blame investment houses with fund managers who bought all this bad paper, bundled it up, and sold it to both foreign investment houses and foreign banks—realizing a nice profit for their fund and for their investors (and pocketing their fat commissions, of course), all the while knowing that eventually this paper was going to "go bad" and negatively impact economies around the world. If people think that America isn't liked because of the war, they should read what people around the world think of our investment companies bringing down their economies and collapsing their banks. Funny how the American media isn't touching that story. I blame the American media.
I don't blame Alan Greenspan or Ben Bernanke. Their job at the Fed was/is to keep money flowing in a way that stimulates business growth in America and keeps the U.S. growing and competitive in the world marketplace. They have done that.
I blame Congress for passing bad banking laws. For eliminating the usury laws and letting the credit industry in general write their own ticket.
--by OaklandWoman
Bush and OPEC. Didn't help that they were in bed together.
--by stang
You forgot the media. They created a relentless drumbeat of negative stories on the evening news and in the print media. It almost seemed like they wanted a recession because of their partisan political beliefs.
--by Red
I blame Hollywood. When I was a child, the popular television shows did not show working-class people owning a large home, two cars, TVs in every room, and every gadget that money could buy. The only "homeowners" in television shows when I was a kid were professional people. And the families stress the importance of saving money, being thrifty, and going to school.
Now Hollywood depicts lower and working class families as having all the "toys" of life—which they can't possibly afford. They grow up thinking that is what they are entitled to have. And they browbeat their parents into buying them things they can't afford just so they will shut up.
--by BlameGreed
The economy was killed by deregulation of the banks together with the economic policies of this regime. Restrictions in place since the Great Depression were eliminated, allowing the Wall Street wonders to slice and dice mortgages and sell the results. That created the housing crisis. On top of that, most of the jobs created in this country over the past seven years require only that you can say, "Would you like fries with that?"
--by alan_gesler (via Yahoo)
Bush & Greenspan—a weaker dollar and a weaker country.
--by Ichenraksha (via Yahoo)
You guys don't get it, do you? Bush, Bernanke, Congress, big corporations, etc. aren't that important. It's human nature. We've been on top of the world and are fat and lazy. We don't want to work hard, save more than we earn, or make our kids bust their butts in school, etc. Let me see, we save $0, we spend double-digit percentage points more than we earn, we let our kids watch 10 times the amount of TV as compared to reading, worship pop stars as idols, and expect the government (somebody) to save us. Compare that to China, India, and other third-world countries that produce as good a product (sometimes better) for 10 percent of the cost. They are trying to kick our collective arses while we change the channel. Turn off the TV, get off the couch, and start producing equal to your standard of living. What a concept. Go figure.
--by fugawee60 (via Yahoo)
Before my comment, a small bit of truth: The economy is not dead. We indebted our economy to its present sick state. I am so sick of Americans who call themselves hapless victims. If we don't believe that we are the ones who most should have known, then we insult ourselves. Did Alan Greenspan get a commission on your mortgage refinance?
--by arctific (via Yahoo)
Why would anyone think that war spending is an economy killer? The defense industry is probably the least 'offshored' of U.S. industries at this time. Of the billions spent each month on the war, much of it is pumped right back into the U.S. economy. I'm not saying this is morally correct, merely that the money spent is an economic stimulus.
--by Yahoo! Finance User (via Yahoo)
It's all fine to make a few dollars more and to bring up the lifestyle of those in other countries. However, when you take a huge number of jobs and move them elsewhere, you severely damage the American consumer. The American consumer was the factor that drove the majority of purchases up until recently. Now they can no longer continue to do that with cheap wages, and worse yet, NO jobs or decent wages. We cannot afford to continue shipping work overseas. These countries do not pay enough for their employees to buy cars or anything else of any significance. If they cannot afford to buy products, they should not be trying to manufacture. Secondly, Alan Greenspan should have stuck to his guns initially when he told Bush no tax cuts, but he capitulated to Republican politics as usual.
--by Yahoo! Finance User (via Yahoo)
Anyone who has taken an entry-level financial-markets class knows that the good times cannot always last. The current downslide of the economy was brought about by financial innovations but not one single person can be to blame. The economy will go up and then later go down. Most of us have lived in a period that has seen record levels of growth, and now the economy has to slide down a bit to readjust. Politicians can't fix it; the Fed can't fix it; only time can fix it. Blaming people gets us nowhere.
--by rickjamesb05 (via Yahoo)
Bankers and savings-and-loan executives knew many years ago that a home loan's value was based upon the homeowner having equity in the home. With that we saw good maintenance and pride of ownership. The idea that every American should own his or her own home is madness. Not every American should own his or her own business. Home loans have recently been treated the same way as auto loans. No one has voiced concerns about the high rate of auto repossessions we have witnessed for many years. I have little sympathy for a foreclosed homeowner who paid no down payment, has no equity, then quit making the payments. They have lost nothing. Why should they be rescued with taxpayers' money? This is only good for politicians who are grubbing for votes.
--by msb1929 (via Yahoo)
--by alan_gesler (via Yahoo)
Bush & Greenspan—a weaker dollar and a weaker country.
--by Ichenraksha (via Yahoo)
You guys don't get it, do you? Bush, Bernanke, Congress, big corporations, etc. aren't that important. It's human nature. We've been on top of the world and are fat and lazy. We don't want to work hard, save more than we earn, or make our kids bust their butts in school, etc. Let me see, we save $0, we spend double-digit percentage points more than we earn, we let our kids watch 10 times the amount of TV as compared to reading, worship pop stars as idols, and expect the government (somebody) to save us. Compare that to China, India, and other third-world countries that produce as good a product (sometimes better) for 10 percent of the cost. They are trying to kick our collective arses while we change the channel. Turn off the TV, get off the couch, and start producing equal to your standard of living. What a concept. Go figure.
--by fugawee60 (via Yahoo)
Before my comment, a small bit of truth: The economy is not dead. We indebted our economy to its present sick state. I am so sick of Americans who call themselves hapless victims. If we don't believe that we are the ones who most should have known, then we insult ourselves. Did Alan Greenspan get a commission on your mortgage refinance?
--by arctific (via Yahoo)
Why would anyone think that war spending is an economy killer? The defense industry is probably the least 'offshored' of U.S. industries at this time. Of the billions spent each month on the war, much of it is pumped right back into the U.S. economy. I'm not saying this is morally correct, merely that the money spent is an economic stimulus.
--by Yahoo! Finance User (via Yahoo)
It's all fine to make a few dollars more and to bring up the lifestyle of those in other countries. However, when you take a huge number of jobs and move them elsewhere, you severely damage the American consumer. The American consumer was the factor that drove the majority of purchases up until recently. Now they can no longer continue to do that with cheap wages, and worse yet, NO jobs or decent wages. We cannot afford to continue shipping work overseas. These countries do not pay enough for their employees to buy cars or anything else of any significance. If they cannot afford to buy products, they should not be trying to manufacture. Secondly, Alan Greenspan should have stuck to his guns initially when he told Bush no tax cuts, but he capitulated to Republican politics as usual.
--by Yahoo! Finance User (via Yahoo)
Anyone who has taken an entry-level financial-markets class knows that the good times cannot always last. The current downslide of the economy was brought about by financial innovations but not one single person can be to blame. The economy will go up and then later go down. Most of us have lived in a period that has seen record levels of growth, and now the economy has to slide down a bit to readjust. Politicians can't fix it; the Fed can't fix it; only time can fix it. Blaming people gets us nowhere.
--by rickjamesb05 (via Yahoo)
Bankers and savings-and-loan executives knew many years ago that a home loan's value was based upon the homeowner having equity in the home. With that we saw good maintenance and pride of ownership. The idea that every American should own his or her own home is madness. Not every American should own his or her own business. Home loans have recently been treated the same way as auto loans. No one has voiced concerns about the high rate of auto repossessions we have witnessed for many years. I have little sympathy for a foreclosed homeowner who paid no down payment, has no equity, then quit making the payments. They have lost nothing. Why should they be rescued with taxpayers' money? This is only good for politicians who are grubbing for votes.
--by msb1929 (via Yahoo)
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