Who’s to Blame for the Financial Crisis?

The blaming game is on as media and the public are outraged by the crash of the financial market and the eroding hopes of a good retirement.  Everyone is a suspect from Wall Street and mortgage brokers to investors, realtors, and experts who failed to accurately predict the impending crisis and credit crunch.  

Top business executives were hauled to the halls of Congress and grilled by angry lawmakers as political candidates point their fingers on each other.  Fence-sitter have their own say also as they offer opinions on who to blame for the current economic mess.

Everyone is a Suspect

As investigations and inquiries go on, culprits will undoubtedly be uncovered for massive cheating and other criminal activities.  As of now, everyone is a suspect in having a responsibility in the current crisis.  The matter will eventually be resolved when questions on who started the avalanche of crisis and who aggravated it have been answered.

SEC Chairman Christopher Cox or Republican Senator Phil Gramm would be principal suspects if you think that loose financial regulations are to blame for the crisis.  

If you think that homeowners were given too much leverage on mortgages more than they can chew, then your man is Franklin Raines, the former top honcho of Fannie Mae.

Or you might be wondering if the housing collapse could have been prevented by raising interest rates, then Alan Greenspan should stand trial.  Or if you think that people should have ignored the no-doc housing loans prominently advertised on the web, then the accused can be found right at your bathroom mirror.

These people however have more pressing concerns in their minds than destroying the U.S. economy.  For one, they are making tons of money – for themselves and for their investors.  Some however are really passionate about the freeing the market from official government regulations.  Of course, only a few will argue against the merits and virtue of acquiring a home.

Blame it on the System

The fact is: the long list of probable culprits is also an indication that institutions, state officials, and ordinary folks really made so many mistakes.  The entire system is to blame according to Reena Aggarwal, a professor of finance at Georgetown University.  It would be wrong to blame one or two persons for the economic crisis, Aggarwal further added.

Presidential hopefuls are also acknowledging the fact that there is no scapegoat for the current crisis.  No less than Senator Barack Obama said that a large part of the crisis was brought about by so many people living beyond their actual means.  Those people will include some from Wall Street, Washington, and even people on Main Street.