Bad Bankers? What about the State?
Last night on 60 Minutes, the President of the United States squarely laid the blame for the economic recession of the last 18 months at the feet of “fat-cat bankers”. I was disappointed, but not surprised, when the questioner failed to do their job and hold the President to account for the fact that state action over the last 40 years was the primary cause of these problems.
The administrations of Roosevelt, Nixon, Carter, Clinton and Bush all created a framework starting with the creation of Freddie Mac and Fannie Mae through to programs and rules forcing banks to lend money to people who in pure capitalist terms could never pay it back. I have written on this before.
Admittedly, the bankers got greedy and had too much faith the “quants” who wrote the computer models that supposedly hedged the risk away to nothing (I still don’t understand how anyone thought that was possible). But so did every investor in the stock market. That is why it works. Greed and fear are the primary drivers of humanity. Nothing will change that.
And now Obama wants to repeat the mistakes that led to the crash of 2008.
The media should make sure they identify the right actors to blame – not trust the elected leadership to tell the truth. That is why we have freedom of the press – to investigate the state!!! 60 Minutes has fallen a long way since the days of Mike Wallace…
If greed caused it, we’d have a financial meltdown twice a week.