I think the article is great in the sense that it puts things in perspective with regards to the culpability of everyone of those who were involved in the making of the crisis. And I believe everyone is entitled to know what happened. For God sake I urge everyone to read the article. It's easy for the layman to understand. My comments below are no substitute to your own judgement and critical reading of it.
Anyway, going by the (in)famous pick-up line “hey girl, you must be an accountant, ‘cause you’ve got a neat bottom line down there”, I am going to cut it short and give you the ugly bottom line of this story.:
Alan Greenspan, chairman of US Federal Reserve 1987- 2006 Basically, the guy has been brilliant all throughout his career and had steered the US economy through turbulent times, but then he did one blunder toward the end: in the last couple of years he encouraged trading in Derivatives (especially Property (mortgage) derivatives.). Honestly, I can’t tell you why trading in Derivatives is a bad thing, but it seems I am not alone in that lack of understanding, billionaires like George Soros and Warren Buffet didn’t understand them and didn’t deal in them.
Bill Clinton, former US president It seems that Clinton had allowed deposit and investment banks to reunite again, by revoking some old law, which protected depositors by separating deposit banks from the instruments that handled investments and the risk that comes with them. This move, it seems, gave rise to sub-prime lending, and sub-prime lending FTW, is the when loans are granted to people who don’t meet the guidelines or the conditions (i.e. will not be able to pay back according to the agreement…hmmm….sounds familiar?). And sub-prime lending is the real culprit behind the credit crunch which we’re experiencing, I mean, it stands to reason that when you give loans to those who don’t deserve it, there will come a point when you’ll not have enough money to lend to those who deserve it or to those who are going to invest and exploit the money wisely and creatively.
Gordon Brown, prime minister I think the writer of the article included him here for political reasons. But nonetheless, he did give bankers undue concessions. (I can’t see why is this a catastrophe: discrimination for or against a certain profession is bad, but it may not always lead you to the edge of the cliff, right?)
George W Bush, former US president While the sub-prime lending has started at the time of Clinton, it’d flourished at the times of Bush. I think what the article says about it is clear and self-explanatory:
“President Clinton might have started the sub-prime ball rolling, but the Bush administration certainly did little to put the brakes on the vast amount of mortgage cash being lent to "Ninja" (No income, no job applicants) borrowers who could not afford them.”
And the list goes on: Senators, bank governors, CEOs of investment houses, insurance companies, housing companies ..etc..
There’s one notable contributor to the crisis: the American public (or the public of any other countries where the people partook in the borrowing craze), here’s what the article says about it:
“There's no escaping the fact: politicians might have teed up the financial system and failed to police it properly and Wall Street's greedy bankers might have got carried away with the riches they could generate, but if millions of Americans had just realised they were borrowing more than they could repay then we would not be in this mess. The British public got just as carried away. We are the credit junkies of Europe and many of our problems could easily have been avoided if we had been more sensible and just said no.”
Some people, however, had been able to predict the crisis and make money out of it. Again, I don’t know exactly how do you do that, and it might even be legal. But it is certainly not ethical. Because you’re making money out of other people’s misery. And what’s more, you’re helping expedite the crisis. You’re not only predicting; you’re acting on your prediction in a way that will make it happen sooner. I know what you’re going to tell me: that free market knows no ethics. Well, this is the problem. Free market needs to be regulated again. And people (the public, all around the world) need to understand their limits and live within their respective means.
My father retired last year after 35 years old career as a banker. The only advice I have ever gotten from him, which he said reflected the bottom line of what he’d learned through his long experience with banking, was summarized in two points:
- Never borrow unless you’re in dire need for the money. And if you borrow, make sure that come-what-might; you’re going to pay back according to the agreed terms. - Never lend unless you know for sure that the borrower is in dire need for it. And that you can give it away for the agreed period without affecting your lifestyle. And that he can pay you back within the agreed period.
It might sound very un-Arabic and un-altruistic, but I’ve actually abided by my father’s advise to a large extent. I will help whenever I can. But I am very wary of compulsive borrowers and I have no sympathy for them. My blunt attitude led to the loss of couple of acquaintances but I don’t regret it. I treat people like I expect myself to be treated.
Don’t get me wrong though, I am not stingy and I can hardly call my lifestyle frugal. And charity is a totally different thing from lending. And I don’t usually like to brag about charity. (on a side note though: so far since the Gaza debacle started, I’ve given 4000 DH to various charities. It's not much but let’s see if you can follow suit, leave a comment if you like :) )
Okay, it’s around my lunch time and I better get going, there will be numerous neat bottom lines at the mall to check out and scrutinize.
O you who walk by the ephemeral words. Pick up your names, and leave. Pull your hours out of our times, and leave Steal whatever you will from the sea blue and from sand of memory, and take what you want of the images, so that you know: How a rock of our earth, builds a roof above the sky. …. O you who walk through the ephemeral words. Stack your illusions in a deserted pit, and leave. Bring the time hand back to the legitimacy of the sacred goat back to the time of the handgun’s music. Because we have a legacy that you don’t fancy; so leave. And we have something you do not: a bleeding country and bleeding people. A country that can be remembered and forgotten. ... O you who walk through the ephemeral words. It’s time for you to leave. And to live wherever you desire, but not among us. It’s time for you to leave. And to die wherever you desire, but not among us. Because we have a work to do in the land. And we have a past here, And the first sound of life, And we have the present and the present and the future. And we have the mundane here, and the eternal. So get out of our land, out of our turf, out of our sea. out of our wheat, our salt and our wound. And from everything, and just get out, from the records of our memory. .....