Monday, February 16, 2009

Time pins the blame

We all like our lists. Ten best. All time great. One hundred to watch. However unscientific, if not out right arbitrary, we like these round ups, don't we?

So if you're wondering who to blame for the economic crisis, Time has done us the great and noble service of coming up with a list of the 25 folks most responsible for the state we're in.

It's an interesting list, no doubt, a combo of the usual suspects and some people I've never heard of, and covers both Wall Street, Main Street, and Pennsylvania Avenue.

On the political side, there's a nice show of bi-partisanship.

Bill Clinton's there because he unlatched the regulatory door, and GW because he ripped the door off its hinges and threw it in the junk pile. Phil Gramm -most recently in the news for calling the American public a bunch of whiners - is in there breaking the politico tie for us. R-2, D-1.

And speaking of the American public, the American consumer is on the blame list, as it should be. However, this blanket blame should be qualified. Frankly, I'm no shirker - way to much Catholic history to not be able to feel guilty about just about anything - but I don't see why I personally should have to shoulder any of this blame. I'm one of those puritanical, self-righteous, goody-two-credit cards with no debt.  (If it's not too late to join the not exactly exclusive club of those with a debt to income ratio is 1.3 to 1, maybe I can take out a mortgage on my condo and go out and buy some Jimmy Choos. Wheeeeee!!!!!)

On the whole, though, I think is important to keep reminder the American consumer that, when it comes to this crisis, we have met the enemy and they are us.

Main Street is also represented by a couple of bankers - Angelo Mozilo of Countrywide, whose bad banking had - what can we say? - a countrywide impact on the economy.  And Herb and Marion Sandler of World Savings, who came up with the notion of the adjustable rate mortgage, and aggressively pushed all sorts of home buyers (c.f., American consumers) into mortgages they didn't quite fathom and couldn't quite afford. Balloon payment, say what? Fortunately for the Sandlers, and unfortunately for us, they managed to unload their bank onto Wachovia for over $2B. They're mortgage portfolio became Wachovia's problem, which in turn helped begat the meltdown. So, a nice Pink Slip shoutout to Herb and Marion: enjoy your retirement.

Of course I knew he was going to be there, I was nonetheless relieved to see Alan Greenspan on the list. Anyone who worships at the altar of Ayn Rand.....(A few weeks ago, my husband had the movie Fountainhead on, and I watched a few minutes. The movie is based on Rand's novel about the architect who can't be bought. Between the wooden acting, the wooden plot, and the wooden dialogue, I will say that the few minutes I watched gave me my laugh o' the day.)

Bernie Madoff's on the list. Just because, I guess. It will be interesting to see how his wife, recently revealed to have cashed out $15M worth of money to stuff in her mattress just before Bernie turned himself in, starts ending up along Bernie in the rogues' gallery.

It's not just Bernie representing. Wall Street's all over the list -  Hank Paulson, Dick Fuld, Chris Cox, Stanley O'Neal, Jimmy Cayce...Not much sympathy for any of these guys. I'm quite sure they have enough bespoke suits and white-collared bespoke shirts to last them the rest of their lives, and beyond.

I do think it's a stretch to put Lew Ranieri, who, as a Salomon Brothers trader thirty-plus years ago, developed the first mortgage backed securities.

One of the  few women on the list, Kathleen Corbet, presided over the bond-rating business at S&P. Talk about grade inflation. All this paper's good as gold! Fool's gold, as it turned out.

A couple of figures in realty made the list - the head of the National Association of Realtors, and the president of Beazer Homes. I suspect the real estate industry could have a 25 to Blame list all of their own. (As could, of course, Washington DC, Wall Street, banking, etc. But you have to start somewhere.)

To me, the most curious name on the list was that of Burton Jablin. I had never heard of him, but as the program director for HGTV, he came up with shows like:

...Designed to Sell, House Hunters and My House Is Worth What? developed loyal audiences, giving the housing game glamour and gusto.

Come on now.

All that putting Burton Jablin on the list does is allow the American Consumers who got swept up in the leverage-buy-sell-flip game a Twinkie defense. (A TV show made me do it.)

Take Jablin off this list.

Who'd I add for Number 25?

I'd like to blame Dick Cheney, but I'm having a really hard time pinning this on him. He's there by W's proxy, any way.

How about baseball players' super agent Scott Boras?

Yes. I'm liking it.

Boras is the man: it's all his fault.

1 comment:

iVirtualProfessionals said...

Interesting article! keep them coming...