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Who is ultimately to blame for the American economic crash?

Le Penseur statue at the Rodin Museum in France, photo by dalbera.

Is the finger pointing resolved?

The highly anticipated and already contentious Federal Crisis Inquiry Commission report has been released after a lengthy investigation into the economic collapse in America. The 600 page report concludes that Wall Street, especially at the executive level, is to blame. It is rumored that the rejection of these findings is the conservative movement who assert the government regulated us into this mess while supporters of the findings note that executives knowingly led banks into the slaughterhouse.

Although many looked to the FCIC report to be the final stamp of decision on the matter, it appears to have only made the issue more divisive.

The fingers are pointing every which direction:

Some point to trade associations like the National Association of Home Builders (NAHB) and the National Association of Realtors (NAR) for lobbying for homeownership. Critics believe that people were sold an idea that wasn’t really for them and they should have remained renters.

There is even a rare pundit on television who claims Realtors knowingly sold homes for more than they were worth and took a massive profit and were motivated by financial gain.

Politicians are being blamed for caving to lobbyists and legislating not based on long term economic health but on short term gains in housing.

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Others point to Barney Frank alone and to his staunch position to promote affordable homeownership almost as a civil right that led to the liar loans that weakened the foundation of housing itself.

Some point to the American drive to innovate as having tone too far and securitizing cash-flow streams to extremely.

Alan Greenspan is taking heat as his position was to keep dramatically low interest rates which although benefited homeowners, it forced investors to take tremendous risks in order to see any yields worth recording.

The robo-signing debacle is commonly pointed to as a major cause of the economic downturn, as companies like Lender Processing Services (LPS) and CoreLogic, both having recently been sued by the FDIC who says they provided automated inflated appraisals causing banks to make investments on loans they otherwise wouldn’t have, thus taking a major financial hit.

Fingers also point to the ratings services because they were in bed with Wall Street and paid to award high credit ratings on securities that they knew were risky.

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The FCIC says it’s Wall Street’s fault

Ultimately, the FCIC points to Wall Street as the primary factor in the collapse, and lawsuits (like the FDIC versus IndyMac’s former CEO for $600 million) are firmly in line with the FCIC’s findings.

History will reveal itself

History has a funny way of revealing itself after the fact, and the reason there is no clear culprit is because the collapse is not yet complete and history has not fully been written. A decade from now, we’ll look back and be able to tell our children the top factors that contributed to the collapse, but because we’re still in it and seeing thousands of broken pieces, it’s difficult to point the finger in one direction.

Tell us in the comments below who you think is ultimately to blame for the American economic crisis?

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Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.



  1. Ben Fisher

    July 14, 2011 at 10:33 am

    Wall street is the pretty obvious choice but it is also very easy to blame everything on them.

  2. Skip Danger

    July 14, 2011 at 12:18 pm

    Those 537 idiots in D.C.


  3. sfvrealestate

    July 14, 2011 at 1:32 pm

    Lani, love ya, but it's abundantly clear that the failure in risk management was a failure of Wall Street and the banks. Who came up with 100% loans to people who couldn't pay them back? The NAR? Barney Frank? Me? You? No, the makers of those loans.

  4. Joe Loomer

    July 14, 2011 at 3:35 pm

    The housing sector collapse is directly related to the bundling and selling of mortgages on the secondary market and labelled as "A" paper – versus the junk they were. The investors trusted the Wall Street bungler's…uh… I mean bundler's ratings and purchased what they believed to be low-risk, high-credit mortgage securities.

    Navy Chief, Navy Pride

  5. Roland Estrada

    July 14, 2011 at 4:34 pm

    With all due respect to the commenters, the ultimate blame can be laid squarely at the feet of the U.S Congress and past presidents. These two branches of government are responsible for writing and oversight of the laws that were past, allowing the wolves into the henhouse.

    There is no doubt that greed and avarice on the part of the financial industry led to our current situation. However their ability to do so had a genesis – the very people we elect to watch after our best interests.

  6. Dr. Detroit

    July 14, 2011 at 10:51 pm

    Who's to blame? Use logic.

    Were banks able to do what they do before Glass-Steagel was repealed? No

    Did politicians repeal Glass-Steagel? Yes

    Did you elect the fools that were warned against doing so? Yes

    Did you RE-ELECT THE BUMS that gave the banks the bailout money over your 100-to-1 objections? Yes


  7. Sig

    July 15, 2011 at 6:13 am

    Perhaps Dr. Detroit is correct that The Idiot American Voter is to blame but what is a voter to do when his/her choice is between Dumb And Dummer? The President and Congress is made up of Dumb and Dummer but Wall St. is not Dumb and they sold us out. Read "The Big Short" By Micheal Lewis and he will explain it to you.

    • Joe

      July 17, 2011 at 7:19 pm

      I did read "The Big Short" and it basically points to the politicians. Yes, it does TRY to point the finger at Wall Street, but if you read in between the lines you will understand that it points the finger at politicians without trying to. Everything that is wrong with our Country is because of our politicians. Simple question – "Are the politicians in the House, Senate, and The White House corrupt? the overwhelming answer is YES, and yet people who agree with this still have the idea that we should give them more power?!! I cannot justify giving criminals more power and control over my life or anyone else's life. The crash was on purpose committed by the lying politicians so they can reap more power and rape the treasury while trying to pretend that they are in it for our best interests!!

  8. Melissa Zavala

    July 16, 2011 at 8:08 pm

    Each and every person who took out a 'creative' loan or used their home to finance their new Escalade or speedboat needs to accept a modicum of responsibility for their actions. Hindsight is always 20/20.

  9. Roland Estrada

    July 16, 2011 at 8:56 pm

    This all great. But again, where is the outrage for the true villains – the politicians! They are the guardians at the gate – or should be. Human nature being what it is, if you give someone an inch, they will take a mile. That someone would be borrowers, real estate agents, banks, Wall Street or loan officers.

    Politicians wrote and or relaxed the laws that allowed everyone to take advantage right on down the line. Mind you, this is not this is a conspiracy theory. Not one bit of this debacle would have been possible without the express or implied consent of our legislators. The collective "We" may taken advantage of the situation, but there was only one source to which this can all be traced.

    The question is, can "We The People" maintain our attention span and hold our legislator's feet to the fire into the future. Sadly, probably not.

  10. gregory

    August 4, 2011 at 11:08 am

    And LPS is SINKING every day, What a mess, Just close the SH*T hole and get it over. You would have to be an IDIOT to invest in that company!!!!

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