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Here is an article I wrote about it:
Who Are We To Blame?
By Andrew Sondag
In the wake of our current economic crisis, fingers are being pointed in every direction. There are talks of greedy CEOs biting off far more than they can chew while still getting their bellies filled with fat. Some say that Republicans and their deregulated economic policies are responsible for ruining America’s future. While others say that the Democrats and their socialistic lending policies are to blame. However, there is still one group of people that has yet to receive one finger pointed in its direction. That group is the American people.
It’s mostly agreed upon that this current financial crisis began with the sub prime mortgage crisis. That is, that lenders were giving out loans to people that clearly didn’t have the means to pay them back. Once people started defaulting on their loans, and the companies started raising debts in the billions of dollars, Wall Street investors started questioning the livelihood of the companies. Stock prices dropped through the floor.
Some people will blame the corporate CEOs and Republicans for this. They claim that the CEOs kept giving out more and more loans to try and turn an ever growing profit, while the Republicans sat idly with big grins on their faces. And it’s easy to blame the CEOs. People love to blame CEOs for the simple reason that they are wealthier than the rest of us. Americans love to chastise the wealthy for wanting to make more money as if it some sort of vice. As if the middle class would be better off by investment banking firms around the country changing their mission statements to “making just enough money to get by”. It is corporate greed that allows a small business to get off its feet via a loan from one of these monstrous investment banks. It’s also corporate greed that allows most Americans to acquire a loan to own a home. All of this “greed” simply expands our economy. So, as easy as it is to blame CEOs, they aren’t the ones truly responsible.
Then there is the argument that Democratic government is to blame. While they certainly are a culprit, they don’t carry the full weight of the crash. Legislation that allowed socialistic lending properties are definitely one of the causes of this economic crisis, but they are not who should receive the blame. Legislation, like the kind that forced Freddie Mac and Fannie Mae to push more and more loans down the throats of low and middle income families, opened the door to economic failure. But, while government action opened the door to failure, it was the people who stepped through.
Just because the government pushes home loan companies to give loans out to people who can’t afford to pay them back doesn’t necessarily mean that more bad loans will be given out. There needs to be people that want these bad loans. These are people who are making $20,000 a year and think they can somehow afford a $1,000,000 home. These are the people to blame for this economic crisis. These Americans stumbled into a real estate office, were convinced they could afford a home way out of their price range, and walked proudly out with a loan they would default on 5 months later.
One could even make the argument that the real estate companies tried to trick these low and middle income families into believing they could afford a home well outside their price range. However, the fault still lies on the backs of Americans. These people weren’t tricked into buying a $20 late-night T.V. product. They were tricked into buying a home. To make possibly the biggest single purchase of their lifetimes without any research or foresight is simply naïve and irresponsible. The single deciding factor was their lending agent, who stood to make a profit, telling them how affordable their out of reach dream home was. The American people and their lack of sense is what has created this financial mess, and now we are dependent on the market to clean it up.
But don’t worry. The economy will bounce back. But, if there is one thing we should take from this whole mess, it is to simply leave the market alone. Regulating the free-market is like building a dam in an almost flooded river. The water is still going to get to the other side, just in a less efficient, less predictable way, while making a huge mess in the process. People aren’t responsible enough to accept any help that the government is willing to offer. Private investment companies realize this, which is why they have standards on who they give loans to. Trying to “help” low income families by giving them loans they can’t afford is asking for failure. So the next time a politician attempts to win your vote by blaming someone from the other side. Just remember, this is the fault of the American people.
 
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