Wikinvest Wire

Let's play the blame game again

Wednesday, February 11, 2009

Justin Fox at Time Magazine plays the Financial Crisis Blame Game and, not surprisingly comes out with you-know-how at the top. Well, actually, "Good Times" came out on top, which is a curious selection, particularly when looking at the rest of the list which contains no other real surprises.

Here's the list (my comments are in parentheses):

1. Good Times
2. Alan Greenspan (lost to a 1970s comedy series?)
3. Twisted Regulation
4. Wall Street
5. The Homeownership Obsession (not HGTV?)
6. Too Much Money (see #2)
7. The Myth of the Rational Market (damn economists)
8. You and Me (hey, speak for yourself)
9. George W. Bush
10. Commodity Futures Modernization Act
This is not an altogether different result than the poll by the U.K.'s Times Online from last week in which it was found that The finger points across the Atlantic and, after that, to their leader of recent years, Gordon Brown.

Here's the part about The Maestro, from whom, little has been heard in recent months, at least according to the website Alan Greenspan News:
IMAGE
It was to smother financial panics that Congress created the Federal Reserve in 1913. During Alan Greenspan's tenure as chairman, the Fed jumped in to keep the 1987 stock-market crash, the 1998 Long-Term Capital Management scare and the 2000-01 tech-stock collapse from spiraling into something worse. But that very successful firefighting fostered the risk-ignoring attitudes that brought on a conflagration. There are some — like 2008 presidential candidate Ron Paul — who argue that the lesson here is that we'd be better off without the Fed. A more palatable interpretation is that if the Fed is going to step in to prevent panics, it needs to do more to deflate the bubbles that inevitably precede those panics. Fed policy over the past quarter-century has been asymmetrical: it bailed institutions out of trouble but did ever less to restrain them during fulsome times. That has to change.
There are handy links to related lists at the bottom of each of the ten blamees, all of which is likely to make readers a bit depressed.

To improve the overall experience, consider playing this Time Warp ringtone from The Rocky Horror Picture Show (right-click, open in new tab, then hit the big red play button).

4 comments:

Nostradamus, apparently said...

I was amazed that you considered changing the name of your blog a while ago.

I found your blog several years ago because I reached the same conclusion you apparently did about Greenspan: He made a BIG MESS of our economy.

I looked up 'Greenspan' and 'mess' on Google, et voila, here I am!

I believe your blog title is part of the reason for your blog's success. (Of course, you're smart, a good writer and you work your tail off, too!)

FWIW, Greenspan will go down in the history books as the biggest villain in the current financial mess and a whole lot of people already see it that way.

It's also galling to picture Greenspan getting a medal from GW Bush. That really says more about Bush than Greenspan.

(It's a lot like "You're doin' a heckuva job, Brownie!" It shows how lame Bush is. But, beware: Obama is not looking any better at this point! It's just more of the same old garbage, I'm afraid.)

While history will show Greenspan is a loser, the top 10 list is correct to point out that people can only blame themselves in the end.

Some of us didn't fall for the 'Good Times' temptations offered by nearly free money.

Some of us were raised to believe "There's No Such Thing As A Free Lunch" and to be VERY suspicious when something (like a half million dollar McMansion with nothing down, 125% financing and interest only payments at 1%) looks too good to be true.

I'm a saver and I've worked very hard and saved very hard for decades to pay off my house and have a wad of cash. I intentionally live way below my means.

My plan was to earn 5-6% interest in bank CDs and retire early and live off the money.

That plan isn't working out so well with interest rates at ridiculously low levels and, to me, the threat of runaway inflation too real.

I avoided the stock market because, as a finance major in college, a former banker and bankruptcy lawyer, I could see that it was a corrupt, Vegas-style, gambling mess with no real substance and huge risk at the ridiculous price levels for almost all stocks.

I had adjusted to the fact that our government encourages borrowing by making the interest deductible and discourages saving by taxing the interest.

I honestly never thought it would go so far as it has to punish savers and reward borrowers. The current 'bailout' fad is simply stunningly unfair.

Greenspan's policies (and now Bernanke's) have made it hard to justify saving money. It's such an insult to get the paltry 1% interest each year and then have to pay taxes on it!

I heard Obama and his surrogates openly state that they want to "get Americans back to where they can borrow money to buy the things they want again."

To me, that is just an amazing thing to admit. You know we're in deep trouble when the new POTUS can say that and almost no one even notices or objects.

Debt is a way of life in America and it will sink us.

I have said for years that I feel as if I'm a 3rd class passenger who is locked below decks aboard the Titanic. I didn't do anything wrong but I'm screwed.

It's a little worse than that because I could see the iceberg coming and I've been yelling to anyone that would listen for years. But no one in power, except Ron Paul, seemed to hear me or agree with me.

That's how I found this blog and I then began to realize that thousands of people saw it coming, too. If all of us 'regular' people could see it coming, how is it that all the powerful geniuses in Washington and on Wall Street couldn't see it coming?

I decided that these powerful people are either liars or wildly incompetent - or BOTH! For that final conclusion, Greenspan is the poster boy.

Obama will still be conducting and his musicians will still be playing as the stern of the USS AMERICA slowly sinks into the dark, cold abyss.

It's a sad story...

Tim said...

I swapped out the photo for one of the medal-pinning ceremony - that is such a classic moment in history that few people appreciated at the time. I've always said, when they write the history books for this period, those are the two faces that will be most prominently displayed.

OT - I can't seem to find your email address. We're thinking about Bend, Oregon and wondered if you had any thoughts on that area.

Nostradamus, apparently said...

Re: Bend, Oregon

We lived there for 1 year and we couldn't get out of there fast enough.

It's VERY COLD and the winter seems to last forever. We couldn't believe it.

We couldn't go for a drive around the Cascade Loops on 4th of July because it was closed due to snow!

Also, things really soared during the real estate boom but it's falling VERY fast and furious and it's a very tough place to make a living now with high prices and low wages.

Also, it's a long way from anything, especially in the winter when the roads can be literally deadly.

We had a house in Sunriver for years and always enjoyed flying there from Portland so we thought it would be a great place to live.

But, we were wrong. When you have to go to work in that kind of weather and driving conditions, it isn't any fun at all.

Unless you are really, really sure you like -15 degrees in the winter, packed snow everywhere until late May and a 1 month growing season, I would not move there.

On the good side: It's beautiful and the outdoor stuff is great when the weather is cooperating. It's also sunny a lot. But, again, it's cold most of the time, even when it's sunny.

Hope that helps.

PS: Would you post your email address so I can write to you privately without posting mine? I can't seem to find yours either?!

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