We seem to need something to blame. I blame the news dartboard. It is too big to miss. Unfortunately, it is also personality dependent so we always need someone to blame. We blame the weather forcaster for the tropical depression instead of blaming an inaccurate forecast.
Since blame is personality dependent, we throw another dart and hope to hit a person. Bullseye! Bush! That will work, but the target is too big, too easy, too many more column inches to write, and too many writers to fill those inches. How about Madoff, the $50-billion Ponzi scheme guy? The same result as Bush. I am afraid that blame is only interesting.
The news dartboard makes it abundantly clear that a lot of things are not in our best interest, like Ponzi Schemes, predatory lending and poor public policy. What it does not make clear is that we do not have to stand for it like an animal in the beam of oncoming headlights. We seem to have a tremendous amount of information at our disposal. Oddly, what we do not seem to be is aware.
For example, are we aware that banks and credit card companies have no mandate to make our business and personal financial lives suck? As institutions, they are not bright lights. At best they are rearview mirrors. From a behavioral point of view, they are like lemmings. They actually need us not to follow them over a cliff. We are their customers and following their plummet does not work for us. Maybe blaming banks will.
Back at the news dartboard, the scoring point for bank failures is a triple score. In Georgia, for example, there have been five bank failures in the last five months and the hits just keep on coming. Another fifteen banks are expected to go under this year, more than twice the number that collapsed there during the savings and loan crisis twenty years ago.
I do not see a scoring headline that says “Banks and Credit Card Companies Lead Country to Prosperity.” Should we blame them further? On one side I can argue that we cannot blame people for not doing what they do not know how to do – such as lead. On the other side I am troubled when bankers who have received tax dollars from the Troubled Asset Relief Program (TARP) refuse to say how that money is being spent.
Article comments
1 - Georgio
I think this is a very good article and I like the dart game..so let me throw a dart and see what you think...before I do I want you to know that I am no expert in this field but what the hell everyone else is throwing darts..so here goes...the first part of the stimulus plan was to give money to the banks so they could recover from their bad loans and loosen up their ability to provide credit to ppl who need it..instead they seem to have used the money to cover their losses.Now they want the second half but congress is balking unless they can be assured that the money would help foreclosures and credit..however I understand that the banks say they need more money just to cover their losses ..it seems there is no end to it..it also seems to me that the bottom line lies with all the bad sub prime loans the banks made .(I will not talk about the predatory loans they made at this time)..so it seems to me that foreclosures are at the heart of the financial meltdown that we have ..so unless we can stop the foreclosures which I understand to be about 11 million at this time we can't help the economy to improve .
This gets complicated but as I understand it a house that was worth let's say 400000 is now worth 200000..now the home owner lost his equity and owes more than the house is worth and to make matters worst he has bigger payments to make because the banks screwed them in the first place (I will not talk about how could they be so stupid to sign such an agreement at this time)..but now we have an arbitrary number of about 200000 that someone is stuck with..so wouldn't it be better to force the banks to renegotiate every loan to make it realistically possible for ppl to pay the mortgage ...I know there are some really smart ppl here on BC so I welcome some dialog on this matter..
2 - Ruvy
Plenty of folks foresaw this disaster coming. It was warned of over two years ago on this site for example.
But some folks had to see only the rose and refuse to acknowledge the thorn at all. The rose is gone altogether and now everyone has a thorn up his butt.
You have more than a depression in housing; you have a credit crunch that your government (owned by the folks who are now withholding the credit) cannot fix. And you are stuck funding over 100,000 soldiers in Iraq.
Then there is always the money that Bernie Madoff with.
3 - Georgio
Plenty of folks foresaw this disaster coming. It was warned of over two years ago on this site for example.
Ruvy ...could you direct me to an article about who saw this coming...I have many well to do friends who did not see it coming but I always believed that homes where over priced and ppl where using credit cards like fools so I agree with you on all points ..but do you have any ideas for a solution..hope you are well in Israel.
4 - Ruvy
I apologize, Georgio. Articles are not arranged here in such a way as to find them with ease. But in 2006, a young lady warned of the debt strangling your country - and was dismissed by the likes of our very own economics "expert" Dave Nalle. I commented there warning of the many crises facing you then. I do not remember the woman's name, but her article was not the only one. An Indian writing here also warned that America would no longer be the economic hegemon it has been. There are lots of comments there, including a whole pack of mine. If memory serves, my persistent comments really pissed off Clavos.
But he seems to have come around to a lot of my thinking, whether he realizes it or not. Go through the archives. I do not have time. I have to prepare for the Sabbath....
Shabbat Shalom
Ruvy