I’ll be frank, this economic crisis has had me baffled. I can not understand how 10% of mortgages in the US being at risk can sink a global economy. I am now subscribing to a straw that broke the camels back or in this case consumer confidence theory.
I have been listening to a lot of pundits on the subject. I heard a really good interview with Steve Forbes Saturday morning he seems to have a good handle on the why and the how to fix.
Anyway we do need to learn from our mistakes and to that end I have put together a list of things I think led to this. This will not be a list that bashes one group, person or party because frankly everybody has some skin in this game. Here it goes not in any particular order. Just free form.
1. Politicians who cannot control their need to spend taxpayer dollars.
2. An economic policy that kept the dollar to weak. (Thanks Alan Greenspan)
3. Consumers who went into hock up to their eyeballs.
4. Failure to regulate Fanny and Freddie Mac.
5. Greedy, stupid bankers and Wall Street moguls.
6. Investors who focused on short term stock prices rather then the long term health of companies and the Boards of Directors who let that drive their decisions.
7, Corporate CEO’s who wasted money on luxuries like corporate jets and fancy parties (take a lesson from good old Sam Walton) and the stockholders who paid them ridiculous amounts even when they did not perform.
8. New accounting rules that needlessly destroyed the book value of some financial institutions.
9. Politicians who mandated banks make bad loans so more people could own homes.
Feel free to add suggestions for additional reasons. i am sure I missed some.