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Who do you blame for the economic crisis?
Posted by NewBlogger2008 • 10/08/08 • Subscribe to this Discussion [RSS] • Report This Topic
Topics: economic crisis, Economy, politics
I was wondering who people are blaming (if anyone at all, or everyone) for this economic crisis. Also I wanted to hear what people have to say on how to fix it.
User Comments
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the need for more and more and more -
I don't think its any one person its a combination of many things.
- Oil stocks a few months ago where up to $130 a barrel this was uncalled for and the only reason they where were stock holders even people like me and other investing into this small "gold rush"
- Rate cuts by Ben B. being very small they need to cut the rates to 1% or even lower! They did this back in 2003 and we where not even in as much of a pickle as we are in now.
- Banks lending out money to people who should not of had it. No hard assets.
more and more interested to hear what others have to say
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Everyone is at fault. Everyone needs to live within their needs. Problem solved (although not quickly). -
The Illuminati-
yes
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I think that we need to go back to 20% down payments on all mortgage and high price loans to ensure this is less likely to happen again.
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Xmarks makes sense. People, by in large, have ignored the principle of "moderation in all things." It was easy to want more, so we all over-extended with easy credit to get what we thought we needed. Creditors became preditory....thereby pressuring lawmakers to make credit aquisition easier....and the cycle spiraled out of control. Fault has an incredible way of spreading itself out, generally speaking of course. -
It's hard for me to put the blame on a specific group but I agree that everyone needs to live within their means. I see this current economic crisis as a consequence of the fact that people have been buying houses and other things they can't afford for years. The bubble had to burst sometime. -
This developing housing "bubble" was plain to see way back in 2006, when no-down-payment mortgages went from only 3% in 2002 to 60% in that year.
Reaction to this clear, ringing alarm bell by the politicians in Congress was typical: like a tortoise on Prozac. They never got around to fixing the problem until it was too late.-
No down payment mortgages are very common here in South Africa.
But we don't have fixed rate mortgages (every time the prime rate goes up, so does the rate on your mortgage), mortgage interest rates are generally between 12 and 15 percent, and the credit test to get a mortgage is demanding.
We have two mortgaged properties and the prime rate went up five times in the last year...our once-profitable rental property is barely breaking even. But people who cannot withstand that kind of economic pressure are seldom able to get a mortgage in the first place, and so it is unlikely we'll have to endure something like the sub-prime crisis here.
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government and also the Mortgage companies and lenders -
www.newsweek.com/id/161936
Bush's fault, obviously. -
The banks that gave loans to people who couldn't afford repayments and made house prices go up: because there was a high demand for property, prices kept going up.
The governements that did not regulate the banks' lending terms (possibly because bankers paid some people off so that they would turn a blind eye). -
Bush, mostly. The captain goes down with the ship! Thank God he's almost gone so he can't make any more bad decisions (although the damage that he has created will hurt for decades most likely).-
mtyler77, wasn't it the Democrats who pushed for de-regulation of the mortgage banks? And is it not Harry Reid and Barak Obama taking the most lobbying money from these mortgage companies?
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No, new blogger--you have that completely wrong. It is the republicans who have always pushed for deregulation. Always.
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leprachauns -
AIG executives said it all. It's American way of life. Credit first, cash later which is my tax payer and retirement savings. -
There's plenty of blame to go around, though maybe "blame" is the wrong word. For instance, should we blame the savings in other parts of the world that was looking for investment opportunities? Should we blame people who go into debt to pay hospital bills or get an education?
Be that as it may, I read an interesting article about Greenspan, who seems to have done his part. www.nytimes.com/2008/10/09/business/economy/09greenspan.html -
Need to go back to basic economics. Why are you and me get 2-3 percent rate when we put our money into savings but banks charge us 19-35 on the credit cards. Something wrong with the system and we need to overhaul the whole financial system. That's just one example.
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everyone else's fault but mine, but because of everyone else my work is suffering darn it!!!
Here comes that rainy day people warn us about. -
The lure for money, where the banks like Lehman themselves fell to their own plot and started investing themselves, and when they went so far ahead and it was a point of no return. -
Aside from corporate greed and corruption, I additionally blame Washington, for turning a blind eye to it and being a part of it -for many years. Obviously when money is involved corporations can not police themselves -though lobbyists fought to avoid any regulatory involvement. First they did away with usury laws and tightened the bankruptcy laws -and allowed mortgage servicing companies to run wild without any oversight. That's what their money bought! Until we take the money out of the equation -and take the "For Sale" sign down from Capital Hill -Americans will continue to have their retirement accounts drained as their their voices go unheard. Listen to our live show on the blog talk radio network today at 1:pm EDT (or you can listen to it after the show) as the Executive Director and General Counsel, Ira Rheingold speaks to Jim and I about his thoughts on the bailout -and meltdown. To hear show go to www.listentospotlight.com -
unlike most people I won't blame subprime loans, those were not the ultimate cause of the current crisis. Had the job market not tanked, had investors in new housing not been inflating the prices, and had we not been lied to for a war in a foreign land that market would still be pretty sound.
This collapse was predicted in the fifties and then again in the seventies, but no one wanted to do anything the economists suggested, because it meant telling Americans everything wasn't going to be sunshine and roses. We sustained a failing economy in the fifties by more closely integrating the racial mix in the workforce, by encouraging more immigration, and creating public projects, the big one was the interstate system.
In the seventies we did a good job of integrating more women into the workforce and pushing higher education.
The current problem is we have have expanded our economic infrastructure so far and so fast we have failed to realize there are no new customers or employees for all the new stores we were putting up. The solution is easy, swallowing it is hard. You have to allow massive immigration and legalize those who are already here. -
I put 3/4 of the blame on Wall Street....."Greed is Good" mentality. Also, you've got to blame John Q. Public for overspending and buying outside of their means. But how could they help it when credit was so easy to get? Have you noticed that the credit card solicitations have all but stopped? I used to get 2 to 3 a day in the mail with checks that I could just write an amount and cash! Crazy! Take control of your finances...don't expect anyone to bail you out! Don't overspend! -
plenty of blame to go around. I won't nail it to any one person or group. -
The Americans... -
I would rather say, All. If anyone learns to be productive using his means whether his skills or his education, then i guess, there will never be economic downfall. -
the corrupt leaders!
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Good question. I discussed this in my article: consumer-responsibility.suite101.com/article.cfm/the_economic_crisis_of_200... -
I blame the welfare state-
?????????????
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We the sheeple...-
LOL! How true. But a few really evil people are at the very center of that blame--they led the sheeple. In the completely wrong direction.
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Exactly!
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Lax oversight of the financial sector, greed, deregulation, skyrocketing oil prices a few years ago, outsourcing of jobs overseas, among other things. While democrats were complicit in the late 90s deregulation, republicans failed to act when things started getting out of hand during the Bush administration and compounded the problems with more deregulation and promoting the "ownership society," encouraging people to buy more than they could afford. -
The Federal Reserve System.-
shhhhhhh... not so loud
On second thought, Hallelujah!!!
video.google.com/googleplayer.swf?docId=3051024550497129264
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I blame lousy spammers.
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MAYBE THIS WILL HELP
Derivative
markets .... an
understandable explanation:
Heidi is the proprietor of a bar in Detroit.
In order to increase sales, she
decides to allow her loyal customers - most of whom are unemployed
alcoholics - to drink now but pay later. She keeps track of the drinks
consumed on a ledger (thereby granting the customers loans).
Word gets around about Heidi's drink now pay later marketing strategy and as a result, increasing numbers of customers flood into Heidi's bar and soon she has the largest sale volume for any bar in Detroit.
By providing her customers' freedom from immediate payment demands, Heidi gets no resistance when she substantially increases her prices for wine and beer, the most consumed beverages. Her sales volume increases massively.
A young and dynamic vice-president at the local bank recognizes these customer debts as valuable future assets and increases Heidi's
borrowing limit.
He sees no reason for undue concern since he has the debts of the
alcoholics as collateral. At the bank's corporate headquarters, expert
traders transform these customer loans into DRINKBONDS, ALKIBONDS and PUKEBONDS. These securities are then traded on security markets worldwide. Naive investors don't really understand the securities being sold to them, as AAA secured bonds are really the debts of unemployed alcoholics.
Nevertheless, their prices continuously climb, and the securities
become the top-selling items for some of the nation's leading brokerage houses.
One day, although the bond prices are still climbing, a risk manager at the bank (subsequently fired due his negativity), decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi's bar.
Heidi demands payment from her alcoholic patrons, but being unemployed they cannot pay back their drinking debts. Therefore, Heidi cannot fulfill her loan obligations and claims bankruptcy.
DRINKBOND and ALKIBOND drop in price by 90 %. PUKEBOND performs better, stabilizing in price after dropping by 80 %. The decreased bond asset value destroys the banks liquidity and prevents it from issuing new loans.
The suppliers of Heidi's bar, having granted her generous payment
extensions and having invested in the securities are faced with writing off her debt and losing over 80% on her bonds. Her wine supplier claims bankruptcy, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 50 workers.
The bank and brokerage houses are saved by the Government following dramatic round-the-clock negotiations by leaders from both political parties.
The funds required for this bailout are obtained by a tax levied on
employed middle-class non-drinkers.
And now you know the rest of the story….-
So funny but true!
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George Bush. -
Failure to delay gratification. People want what they want, when they want it, without giving thought to how they'll pay for it. -
BUSH! -
The question: Who do you blame for the economic crisis? and the question: Who is responsible for the economic crisis? are two very different questions.
Those who blame are those who are NOT inclined towards taking taking personal responsibility for their own actions. They habitually scapegoat the same politicians that they voted into office. They also fail to recognize that blaming is a useless activity.
Those who are responsible have no difficulty facing the facts. Despite the ludicrousness of the concept, the economic policy of all past US Administrations have been optimistically focused on perpetuating the myths of
(1) never ending growth; and
(2) no need for regulation of corporations and/or financial institutions.
The economic crisis the whole world is facing is rooted in the past and by that I do not mean the last 8 years of irresponsible Republican Administrations that brought the crisis to a head.
The US public debt exceeded over $9 trillion dollars in 2007 and practically all of the US national debt owned by foreigners is held by private investors except for central banks, which hold 64%. In June 2007 the Federal Reserve reported its amount at US $755 billion. That means the size of the foreign owned portion of the amount owing was almost three times the total amount of currency in circulation.
More that 40 % of American families spend more than they earn. In fact, the average US family's credit card balance is now almost 5 % of its annual income (with a median U.S. household income presently at $43,200), and personal bankruptcies in US have doubled in the last decade and the overall consumer debt has reached $2.46 Trillion as of June 2007 (excluding the $440 billion of revolving home equity loans, $600 Billion owed for second mortgages and an overall $9 Trillion in mortgage debt). As such, the total US consumer revolving debt grew to $904 Billion in 2008.
Whether or not jobs will go to US workers or instead be outsourced depends on whether the US can provide sufficient value in a global marketplace. Outsourcing has gone overseas because (1) it could - via the internet, and (2) it made economic sense for the corporation. Unless the US government imposes restrictions on the current model, you can expect that to prevail.
My answer to the question Who is responsible for the economic crisis? is:
the American voters are responsible for deluding themselves into believing that never ending growth economic was a sustainable and sane one and for electing the politicians who did them in. They are likewise responsible for living beyond their means. And they are responsible for accepting the fact that it's time for the dog in the manger Republicans to STFU! They lost the election and it's in the best interest of all Americans that they wake up, face reality and work together to affect the changes required. -
For a funny but true description I posted this analogy:
projectsaviorreborn.blogspot.com/2009/03/financial-crisis-explained-in-alco...
It pretty much says it all. -
I blame the banks and the auto manufacturers. Both continued to peddle goods that made no profits. All they looked at was sales and not profits for those particular products. They've been losing money but continued anyway. The banks sold loans to people who shouldn't have been qualified to buy them in the first place. The auto makers have been selling models of cars that have been money losers for decades. Now we have failing companies and way too many unemployeed people.
Actually - I blame Ronald McDonald.-
There are DEFINITELY people to blame for this. It is not a question of the whole society or all of us contributing to it inone way or another. That is an absolute lie. There are people with blood on their hands, and they should be held accountable.
More than any other individuals, Alan Greenspan and Phil Gramm. You can also throw in AIG management, and the CEOs of almost all the major banks and investment banks. All together, you come up with maybe one or two dozen people.
I wrote a lengthy post about it on my blog, and you should read it if you're interested. I did some digging and when I found out that the problem was started by two acts of Congress passed at the behest of the offending institutions themselves, I was absolutely disgusted.
Here it is:
www.pterodactylpuke.com/2009/03/quests-for-truth-and-blood.html -
Okay, I won't blame Ronald McDonald anymore...
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Sorry, I clicked the wrong 'reply' link. I do think Ronald MCDonald should be jailed for his crimes though.
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the corrupt and greedy people! -
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I blame the Devil he is very naughty and would do something like this.
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I'm going all the way back to Adam Smith, and the birth of a badly flawed economic philosophy of free markets, free will, and rational behaviour. Our technology and the complexity of our culture is way ahead of our socioeconomic philiosophy.
I won't link drop, but I just posted an extended article on the subject which I believe pretty much stakes out my position; "The Markets Are Not Rational". Read it and weep. -
I agree with "The Markets Are Not Rational".
and I blame;
Everyone who do not join and refuse to join in "real production" in their economy and trying to earn money by speculative efforts or companies that give no real services. -
Credit card companies are ruining your credit score and contributing to our economic malaise. Take Action!
weblogs.sun-sentinel.com/news/opinion/theslant/blog/2009/03/how_credit_card... -
It's interesting how no one is standing up and saying, "I'm to blame!!! I've been spending more than I earn for years. I've taken out every dime of equity in my house and blew it on vacations, take out and new cars. I didn't even read the disclosure page on my mortgage explaining out my payments will rise in the future. I don't have any savings. I don't save any part of my paycheck. Even though I make more money than most people in Europe or Asian, I'm too interested in spending little things to entertain me to save nearly as much as any of them."
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I blame everyone who refused to consider the reality of trying to force a spiraling market onto workers whose means of supporting it were constantly being undercut. That includes:
Lenders with a lot of wazoo loan products
Oil men who conspired with Detroit
Supporters of outsourcing
Anyone who applied fees that people couldn't tell what they represented (whether hedge fund managers or bottom-line salesmen)
Politicians oiled with lobbyist bucks
Pharmaceutical companies who continue to gouge the public
Workers Comp overseers whose premiums for construction workers drove many contractors to hiring undocumented aliens to do construction work
Congress who gave all those tax shelters to the wealthy so that they often paid far less than their secretaries making 10 bucks and hour.
The solution might just be to start over again. With this level of debt, we just might see the Dollar go the way of the Ruble before long. Russia was wrecked. But it came back. We may yet have to do the same. -
your mom
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Your fault ...
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World economy did not collapse in one day; capitalists began poisoning economy slowly and slowly by investing in essential commodity and service sectors. Lack of demand from needy finally failed them. Losses in investments shattered investors, directly affecting investment banks and other lending institutions. Failing entire economy of country that dominated the world trade led to failing trade connected countries. Many countries economy failed as population of importing countries trimmed consumption due to inflation, job losses and layoffs. Countries which exported and relied on export of essential and non essential commodities too collapsed as employment down and layoffs up.
www.sadashivan.com/thequotstressquot/id6.html -
its the spaghetti monster I guess. He created the world. Now he wants a purging of the economic set up. so he added the recession factor. So that the not so strong shall perish and the strong shall carry on the earth to better 69 dimensional region. -
Where do I begin? The crisis was not caused by real estate itself, it was caused by loosening the credit rules to allow lower credit worthy people to buy houses that were overpriced due to the demand caused by loose credit rules. The governments willingness to disregard financial regulation in real estate as well as banking, caused credit to expand too fast and too long, creating a shadow banking system that was completely unregulated (also called the securitization market) and whose risks were not understood (which caused rating agencies to declare that these securitized loans were safe). In this environment, people either were greedy and bought houses to flip or just bought because they could for the first time ever. Once the house of cards came down, most thought it would only impact the subprime market...boy were they wrong!!! Blame clearly goes to greedy Wall Street market makers and their complicit government enablers. -
Greed and corruption mixed with a housing bubble that preyed on the financially illiterate. -
Ur momma, just joshin
Uncle sam-
Uncle sam???
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Ight, wellb I'm bored soooo hollaaaaa!!!!
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Thanks for that.Financially lost f@$kers.
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Did not really see the economic crisis in Thailand. They don't let us borrow beyond our means here
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I blame ducks. They are always swimming in my pool. I know they have to have something to do with this economic crisis! -
We probably wouldn't be in this mess if we haven't been at war for 8 years straight and counting.
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Who cares about economic crisis hen world will be in crisi on 2012 AD
www.nmcgroups.blogspot.com visit this National Media Crew Group Site for detail report on 2012 doomsday. -
Comment removed by government-
Comment removed by the government
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A mixture between us (normal people) and the banks.
The banks for letting us have too much credit, and us for taking it without opposition. -
None, its time to stop blaming rather its time for introspection.-
yup, yup!
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It's funny watching everyone blaming everyone else. It's comedy to me. -
The blame is on speculation. There was a time when baseball bards were hot, and people made a coin on such silliness until the bubble burst. On a larger scale, the same happened with Internet dot com stocks, until that bubble burst. The problem is the same speculation happened in the housing market. These are our homes, not baseball cards! They are a foundation of American life. When the house speculation bubble burst, we all suffered. So who is to blame for the housing bubble, when it could have easily been held in control? Our politicians and monetary policy. Easy money, easy credit, goosing up the economy to get politicians reelected. Our new tulip mania. -
wp
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I don't know. Consumers are still pessimistic about spending money, choosing to hold onto it instead of spending it. In order for the economy to recover, money must flow in the economy. The Asian countries have now announced that they are out of their recessions and France and Germany are showing signs of a stronger recovery than the U.S.
I am glad to see that the Swiss Banks are turning over the names of U.S. citizens with accounts. We'll see what happens. -
The Federal Reserve bank is the main culprit. You can't just keep printing more money and think it is going to fix the problem. If the federal government would quit interfering with the free market system, America would be prosperous again -
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and how!
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since bush was in office when it all started and everyone is shitting on his head, I shall go the other route and blame LARRY KING!! he spent the us's money on those ugly (not) things hanging on his pants (probably to hold up his upper and lower half together)
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Dead thread !
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Blame China for extending our (American) credit when we know we can't pay it back! -
The biggest holder of US debt are The Federal Reserve and Intergovernmental Holdings
www.nomorepencils.com/2009/05/its-wen-jiabao-time-again/ -
Republicans - is this even a question? 8yrs of Bush did the job -
Congress could fix it by lowering taxes and getting out of the American people's way.
The blame lays with the congress, the Federal Reserve and both of the last two presidents.-
I think it goes back way further than the last two presidents. Government has been operating in this flawed way for many many many years, whether Democrats or Repulicans were in office. Reagan made some head way but not enough
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@lnclark1950: So what you're saying is: if Plan A fails, fall back on Plan A
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Well, honestly I believe that it is mostly Mr. Bush's fault. Not as in he caused it but rather he didn't take the appropriate measures to contain this tragedy when it was possible. I also do not believe that Obama is necessarily adding to the problem. I understand that the deficit is high, partly because of the stimulus package, however, I do believe that because of that stimulus package and Obama's further plans for the economy, that the deficit, and with it the economy, will improve greatly over the next 4 years.
if you would like, you can read more about my opinions on my blog at: compromiseoftwilight.blogspot.com. -
Everyone, and our consumerism culture.-
Because buying things is bad for the economy?
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congress
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This economy was like the idiot who was axing the very branch of the tree where he was sitting. There is nothing surprizing in the fall. -
The Internet is to blame.
Stupid Internet!-
You say the same to rain too?
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Your right!
Stupid Rain! -
And on a hot day, you curse the sun too?
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No the sun is one of the few things I like.
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Even I like the sun.. to go to the beach with my shades on..
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Wait,I mean Obama is to blame for the crappy economy.
Stupid Barrack Obama!
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