Public shares blame for economic collapse

Both are correct to a degree, but both responses are simplistic. Certainly the directors and CEOs of major financial institutions cashed in at the risk of shareholders until the system collapsed, but they had willing partners in economists, politicians, small businessmen and consumers. Everyone supports a practice when there’s money to be made, and as the sub-prime mortgage industry evolved, few people complained or warned of the consequences. Business was too good.

The economic boom of the past decade was built on the housing industry that we now perceive as a house (no pun intended) of cards. Today, with virtually no building taking place, we’re beginning to understand how much that contributed to the local economy. Now that nature has taken its course, the expedient thing to do is to affix blame.

In reality, consumers are equal partners in the development of the crisis. Consumers signed on to risky mortgages, committing more of their income than they could afford and more than they were likely to repay. They used the easy credit to build a huge debt load as if good times were guaranteed for perpetuity, not just in the purchase of housing, but also in the acquisition of consumer goods. Personal debt soared, even excluding debt for housing.

Now we struggle to ride out the crisis. We commit another $700 billion in debt to calm financial nerves and we keep wary eyes on the Dow Jones Industrials. Job loss, bankruptcies and business closings, the natural consequence of overspending, will increase.

Blame the Republicans, blame the Democrats, the banks or Wall Street. But reserve a little for consumers as well. No one forced us to take those risky loans, told us we had to increase our credit card debt or forced us to acquire a home equity loan to take a vacation. Greed and financial irresponsibility are not exclusive to Wall Street or to any political party. We’re all in this together because we were all in this together all along.