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.
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.
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?