There is lots of blame to go around. But who was the captain of the ship when it sank? GWB and the de-regulators. The SEC appointed by Bush failed to act and gave Fannie and Freddie the go ahead as well as Merril Lynch and AIG to speculate without oversight.
This is not a time to play the blame game, it is the time to repair and restore.

This is not a time to play the blame game, it is the time to repair and restore.
Can you send that message along to Pelosi?
But who was the captain of the ship when it sank?
Which is one reason an Obama presidency may be tolerable…when the economy goes to hell in a handcart…he may be the one at the wheel.

Republican controlled Congress in 2004 and, instead of reining in Fannie and Freddie, loosened regulation. Those Democrats that were quoted didn’t control White House policy and the Congressional agenda. Republicans–including McCain and his minions–were on Fannie and Freddies dole and payroll.

It’s the fault of each and every one of us shareholders. When we saw the banks loaning money to people who couldn’t pay it back, we should have pulled out of the financial sector. Dave Ramsey saw this coming 8 years ago.

It’s nice to know that the larger American public is more discerning than our blogger here.
But I doubt there are many in the reality-based side of the political chasm who would expect otherwise.
When conservatives follow their lust for deregulation, chaos follows, fed by lies, fraud and criminal actions by otherwise “good people”.
It does take quite a bit of willful ignorance to continue to believe that deregulation will do anything but make money for some sub-group of criminals, and harm the country as a whole.

Some of those criminals being those who give the most money to Obama, Dodd, Frank…among some Republicans.
To blame it on one side (when the Democrats’ opposing of regulation of Fannie Mae and Freddie Mac) is less discerning than the larger public.
There is enough blame to go around – Democrats and Republicans. You don’t even appear to get that far.

ZZ, I’ve heard that the loan defaults are really only the trigger for this crisis. The credit default swaps are the real fuel for the fire. Through speculation and leverage there are roughly ten times more credit default swaps then actual outstanding debt. So when the investment banks defaulted they had a much greater effect than the loan defaults should have had.
Most of the parties in these CDS transactions net out their risk (they buy and sell opposite transactions), ao in theory a default should not hurt them. But AIG did not do that and their CDS obligations bankrupted them. Any bank holding a CDS where one half of the transaction goes sour is also likely to go belly up too.
Since the CDS market is unregulated and completely opaque the banks have stopped lending to each other because they don’t know who has what exposure and how much. There’s a concern that any bank you lend money to could go belly up overnight.
So even if you knew that the banks were lending to people who couldn’t pay it back, what you couldn’t know was how much leverage was in the CDS market.

I heard on This American Life today that in Dec. 2000, some provision allowing deregulation was slipped into the 2001 budget which passed unanimously, 95-0.
http://www.thislife.org/Radio_Episode.aspx?episode=365
I almost understand it …
But, the idea it brings to my mind is that the good economy this arrangement provided probably got George W. re-elected. That’s the real stinger.
Nonetheless, the show’s commentators suggest that, if bankers had been prevented using the CDS vehicle, they would have devised an equivalent way of making money.

greed. at our expense.