Step right up to play the blame game
Homeowners for getting mortgages or lines of credit they couldn't afford? Lenders for making loans no sane professional would touch? Wall Street for happily distributing those loans throughout the financial stratosphere as mortgage-backed securities? The feds for keeping interest rates rock-bottom low and hyping homeownership? Real estate agents and others in the industry for assuring Americans that, no matter what, "now is a great time to buy"?
Everyone?
I pose this question because two journalists have weighed in with a book called Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis. So, without further ado, I'd like to hear which group you most blame. (Just to be absolutely clear: Choosing one group does not necessarily mean you're saying the rest were innocent.)
UPDATE at 5:15 p.m. on Sunday: Most of you think either homeowners or the mortgage industry is most to blame -- the two categories each have 31 percent of the vote at the moment. Next after that: the "Everyone's equally to blame" category, with 22 percent.
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Comments
Jamie your poll is far too simplistic. It isn't an either/or, nor is everyone "equally" to blame. Certainly everyone involved *shares* in the blame.
Posted by: MrRational | July 4, 2008 8:45 AM
Ah, but that's why I ask who's most to blame. Whenever economists bring up the subject, they'll name a number of groups but will usually pick one they think is more culpable than the rest.
Posted by: Jamie Smith Hopkins | July 4, 2008 9:00 AM
Ahh, good question. Everyone is to blame.
But at the top are the homebuyers, the mortage bankers and the realtors. They started this chain reaction.
Posted by: Anon | July 4, 2008 10:45 AM
I voted for everyone equally because I think all the causes are linked in one way or another. The general problem I think is that some of the players involved are just collecting a fee while others have skin in the game. Those with skin in the game need to recognize that those who make a living by selling something (real estate agent, mortgage broker, mortgage back security broker, etc.) are going to tend to do what is best for them.
So, the borrowers should have been wary of a mortgage broker who can somehow find a way for them to purchase something that they couldn't before. The investor that purchased securities backed by mortgages should have been wary of who did the underwriting and what was truly backing their investment. Of course these service providers are supposed to look out for their clients best interests as well so they can be blamed too.
Posted by: Jamie | July 6, 2008 10:22 PM
Freedom means freedom to succeed or fail. Easy lending isn't a bad thing, but greed, lying, cheating is.
Posted by: Dunn | July 8, 2008 2:43 PM