TIME has released the first 25 People To Blame For The Financial Crisis list.
Let the finger pointing continue. (Not that I disagree with any of the names on the list.)
I would just like to see some self assessment from TIME as well.
How many hero stories has TIME written about the individuals who now are the Darth Vaders’ of the American Economy? How many rosy stories about home ownership, financial genius? Pointing their fingers at Better Homes & Gardens is about as close as they get to some media self assessment.
Analysis of what went wrong is going to be a critical part of our healing process. But the key question that needs answering is – when an organization, say Countrywide, starts utilizing questionable business practices that force an entire industry to follow suit – How can the market correct the imbalance… the government regulate the entity… the consumer avoid the temptation… in a way that doesn’t destroy the ability of real innovation to flourish?
Too many of the issues we face today appear to come from business practices that could only exist by not being exposed in the light of day. Loans made without proper evaluation of documentation. Insurance (Credit Default Swaps) written in ways that avoid the term insurance so regulation and reserves became unnecessary. Business practices that cut corners and in the short term inflate balance sheets. And Wall Street loves an inflated balance sheet, forcing other public companies to hold their noses and dive in, either willingly or simply after the folks who knew better are forced from leadership ranks.
Where is TIME’s responsibility?
UPDATE 3/17/09: Interesting update to the blame game. James Kwak at Baseline Scenario posted this at Planet Money identifying Greenspan as the one we should blame for the crisis. His reasoning is that Greenspan was both wrong and had the power/ability to do something about the crisis due to his unique position in the world economy. A very good read.
UPDATE 3/18/09: And now for a reversal – William Cohen points out the top 5 scrapegoats for the financial crisis.
