There's enough blame to go around

There's enough blame to go around

Since the financial crisis began in 2007 over 2.3 million homes have been foreclosed in the United States (cnn.com). This figure does not account for any of the other financial losses that would naturally accompany a home foreclosure ,such as: loss of pensions and savings, car repossessions and defaulted credit card debt. These figures do not even take into account the loss of self worth when one losses everything they had, and can no longer provide for one's family.

It is safe to say that almost everyone in world was affected, one way or another by the global financial crisis, some greatly more than others. In response to this crisis the public has looked for someone to blame; who should be held accountable for the global economic losses? Most people blame the financial institutions of Wall Street. While others contend it was the government's lack of oversight that helped to perpetuate the financial collapse. There are even those who blame the average citizen and consumerism. While there are definitely good reasons that each of these should be charged with the crime of the global collapse, I believe that the global financial crisis was the result of the combined failures of all three.

Let's start with the obvious: we are in a recession caused by banking greed and an over inflated housing market. No one would argue that the practices of Wall Street directly led to the financial crisis. The use of structured finance that allowed small amounts of money to leverage large investments with little to no capital backing them (Global Issues 139) was risky and shortsighted to begin with. Billions of dollars where invested with the expectations of high returns. Only to be found out later that these high priced funds were essentially worthless containing little to no real money value. What they actually possessed was a myriad of high priced, un-payable loans and foreclosed mortgages. When it was finally discovered that these loans were worthless it was already too late, millions of people had already lost their savings, pensions and homes.

While the banking industry was out offering these faulty loans to the masses, where was Big Brother? Isn't there an elected government body in place to protect individuals from these predatory practices? Apparently not. For a government to interfere in its financial market would be un-American. To do so would violate the basic tenets of a free-market economy. So the government took a giant step back. The deregulation and lack of oversight allowed the financial institutions to make their own rules. Financial companies were buying and selling packaged loans with the contents being unknown to the consumer. Little to no disclosure became the norm, resulting in loans in which people didn't even know what they had.

Last but not least we come to the consumer: you, me and everyone else who purchased anything in the last five years. While it is true that Wall Street provided us with faulty loans, and the government sat by and let it happen in the name of free-market; when it comes down to it we can no more blame the banking industry for our financial woes, than a drug addict can blame his dealer. While there is a certain amount of responsibility in the hands of the drug dealer/banking industry, ultimately the decision was ours to begin with. We were all 塗igh on prosperity and our drug of choice: easily accessed credit. Since 1988, U.S. individual consumer debt has tripled (Global Issues 140). Americans have become accustomed to debt; owing more than one owns has become the national standard. Our society has become ingrained in the notion that possessions equates happiness, therefore buying is the pathway to that happiness. This dangerous fallacy that has been fed to us since Capitalism began.

So again the question is asked, who is to blame? I would like to pose the answer: Who is not to blame. From the gilded towers of Wall Street to the condos on main street, people everywhere were caught up in the frenzy of cheap buying. Politicians sat around congress while CEO's and Wall Street big wigs took advantage of the deregulation. Mortgage companies gave out housing loans with barely more than a signature required, and of course there was Joe Schmo- ready and waiting with a pen and paper.

The global financial crisis was an enormous failure caused by all parties involved. No one person, industry or government can be blamed. Even though the global financial crisis was a hard lesson to learn for everyone, it was one that needed to be taught. So where do we go from here? There is no easy answer to this questions, and no issue is as simple as I have laid out here. However, there are some valuable lessons to be had. Deregulation and lack of government oversight does not work. People will always take the advantage if given the opportunity, even if those advantages cause harm to others. A government body must be in place to oversee financial industry and ensure the protection of its citizens. After all, it was the taxpayers who ended up paying the largest price in this crisis. Another lesson that should be taken away from all this is

There's enough blame to go around

Since the financial crisis began in 2007 over 2.3 million homes have been foreclosed in the United States (cnn.com). This figure does not account for any of the other financial losses that would naturally accompany a home foreclosure ,such as: loss of pensions and savings, car repossessions and defaulted credit card debt. These figures do not even take into account the loss of self worth when one losses everything they had, and can no longer provide for one's family.

It is safe to say that almost everyone in world was affected, one way or another by the global financial crisis, some greatly more than others. In response to this crisis the public has looked for someone to blame; who should be held accountable for the global economic losses? Most people blame the financial institutions of Wall Street. While others contend it was the government's lack of oversight that helped to perpetuate the financial collapse. There are even those who blame the average citizen and consumerism. While there are definitely good reasons that each of these should be charged with the crime of the global collapse, I believe that the global financial crisis was the result of the combined failures of all three.

Let's start with the obvious: we are in a recession caused by banking greed and an over inflated housing market. No one would argue that the practices of Wall Street directly led to the financial crisis. The use of structured finance that allowed small amounts of money to leverage large investments with little to no capital backing them (Global Issues 139) was risky and shortsighted to begin with. Billions of dollars where invested with the expectations of high returns. Only to be found out later that these high priced funds were essentially worthless containing little to no real money value. What they actually possessed was a myriad of high priced, un-payable loans and foreclosed mortgages. When it was finally discovered that these loans were worthless it was already too late, millions of people had already lost their savings, pensions and homes.

While the banking industry was out offering these faulty loans to the masses, where was Big Brother? Isn't there an elected government body in place to protect individuals from these predatory practices? Apparently not. For a government to interfere in its financial market would be un-American. To do so would violate the basic tenets of a free-market economy. So the government took a giant step back. The deregulation and lack of oversight allowed the financial institutions to make their own rules. Financial companies were buying and selling packaged loans with the contents being unknown to the consumer. Little to no disclosure became the norm, resulting in loans in which people didn't even know what they had.

Last but not least we come to the consumer: you, me and everyone else who purchased anything in the last five years. While it is true that Wall Street provided us with faulty loans, and the government sat by and let it happen in the name of free-market; when it comes down to it we can no more blame the banking industry for our financial woes, than a drug addict can blame his dealer. While there is a certain amount of responsibility in the hands of the drug dealer/banking industry, ultimately the decision was ours to begin with. We were all 塗igh on prosperity and our drug of choice: easily accessed credit. Since 1988, U.S. individual consumer debt has tripled (Global Issues 140). Americans have become accustomed to debt; owing more than one owns has become the national standard. Our society has become ingrained in the notion that possessions equates happiness, therefore buying is the pathway to that happiness. This dangerous fallacy that has been fed to us since Capitalism began.

So again the question is asked, who is to blame? I would like to pose the answer: Who is not to blame. From the gilded towers of Wall Street to the condos on main street, people everywhere were caught up in the frenzy of cheap buying. Politicians sat around congress while CEO's and Wall Street big wigs took advantage of the deregulation. Mortgage companies gave out housing loans with barely more than a signature required, and of course there was Joe Schmo- ready and waiting with a pen and paper.

The global financial crisis was an enormous failure caused by all parties involved. No one person, industry or government can be blamed. Even though the global financial crisis was a hard lesson to learn for everyone, it was one that needed to be taught. So where do we go from here? There is no easy answer to this questions, and no issue is as simple as I have laid out here. However, there are some valuable lessons to be had. Deregulation and lack of government oversight does not work. People will always take the advantage if given the opportunity, even if those advantages cause harm to others. A government body must be in place to oversee financial industry and ensure the protection of its citizens. After all, it was the taxpayers who ended up paying the largest price in this crisis. Another lesson we should take away from this is that as consumers and as Americans we must recognize the dangers of the consumer culture we are constantly buying into. The “buy now, pay later” mind frame is not a sustainable model for which to build financial success, we can see it only leads to failure.