25 People to Blame for the Financial Crisis

There is a strange and strangely interesting list of people to blame for the Financial crisis from Time magazine. It is quirky and odd and in more than a few places, misguided and ignorant.

Despite its deep flaws, it is still kinda interesting.

I normally don’t link to this sort of click bait — you must click through each individual adding 25 phony pages in an obnoxious attempt to improve traffic readings — but there is this interesting variation: Readers get to vote on each culprit. Surprisingly, they move Clinton, Bush and Greenspan way down the list.

A few strange issues with the list: Why is Bernie Madoff here? He is a common thief (perhaps uncommon thief given the amounts he claimed to have stolen) but he had nothing whatsoever to do with the Financial crisis afflicting the global economy. What journalist would add him to the list of causes of the crisis? (Strike that moron from your reading list).

The American Consumers are on the list, but not the irresponsible home buyers? Isn’t painting with an overly broad brush ? And Wen Jiabao, the premiere of China? How dare you buy our debt! Its all your fault!

And where are Robert Rubin and Larry Summers on the list? MIA. They worked for President Bill Clinton, who I note in Bailout Nation signed both the Repeal of Glass Steagall, and the Commodities Futures Modernization Act on their advice.

I give a lot of blame to Clinton — but even more to Bush. He was Captain of the ship when it hit the iceberg, and while many risk factors were already in place on January 20th, 2001, it was he and his team of incompetent SEC chairmen and other deregulators that made a bad situation much much worse.

Regular readers of this blog know I think former NAR chief economist David Lereah is a lying jackass, a festering hemorrhoid on the fields of both economics and real estate. But he was merely a lying cheerleader. As much as I detest his syphilitic-addled unfunctional brain, I cannot blame him for what happened.

Same for HGTV. Go figure that Home & Garden Television did shows about homes and gardens. Blaming television for bad decision making by lenders, regulators, and borrowers is absurd. But if you are going to blame HGTV, why not blame CNBC also? (I think both are ridiculous to hold culpable, but at least be consistent). Perhaps it would be more appropriate to blame the Conspiracy of Optimism that exists, especially in financial television.

Of all the people to put at the top of the list, the Man with the Tan is not the guy — sure, he’s a putz who advocated no money down mortgages as he extracted 400 million dollars from Countrywide as it went down the tubes — but he was only one of the many jackasses who made totally irresponsible loans. Why is he the symbol for this sector, and not the 300 plus mortgage originators who went belly up? Its an entire industry, not one or two companies at fault.

And placing Jimmy Cayne, Bear Stearn’s CEO at the bottom is similarly absurd. Bear was the single biggest player in the Mortgage Backed Securities industry, and the first major iBank to go ka-boom. Why isn’t he at least in the top 10? Certainly, he deserves more blame than the hapless Stan O’Neal of Merrill and Lehman’s Fuld ? And where is the CEO of Morgan Stanley? (Gee, I guess they had nothing whatsoever to do with this).

And while the former CEO of the ratings agency Standard & Poors is on the list, where is the even bigger Moody’s? (and Fitch, also).

None of the monoline bond insurers are included: MBIA, Ambak, FGIC. When they collapsed, they utterly disrupted municipal finance. They must be included on a list that seeks to assess blame.

Finally, holding Lew Ranieri – the father of mortgage-backed securities — to blame for what happened is like blaming Oliver Winchester, the inventor of the repeating rifle, for WWI. He merely invented a tool, and it was subsequently misused by others. I guess this means that the farmers who grow corn are responsible for obesity also.


Here is the flawed Time list:

1. Angelo Mozilo – Co-founder and former head of Countrywide
2. Phil Gramm – Chairman of the Senate Banking Committee from 1995 through 2000
3. Alan Greenspan – Former chairman, Federal Reserve
4. Chris Cox – Former chairman, Securities and Exchange Commission
5. American Consumers
6. Hank Paulson – Former Secretary of the Treasury
7. Joe Cassano – Founding member, AIG’s financial-products unit
8. Ian McCarthy – CEO, Beazer Homes
9. Frank Raines – Former chairman and CEO, Fannie Mae
10. Kathleen Corbet – Former CEO, Standard & Poor’s
11. Dick Fuld – Former CEO, Lehman Brothers
12. Marion and Herb Sandler – Former heads, World Savings Bank
13. Bill Clinton – Former U.S. President
14. George W. Bush – Former U.S. President
15. Stan O’Neal – Former CEO, Merrill Lynch
16. Wen Jiabao – Premier, China
17. David Lereah – Former chief economist, National Association of Realtors
18. John Devaney – Hedge fund manager
19. Bernie Madoff – Ponzi scheme orchestrator
20. Lew Ranieri – Father of mortgage-backed securities
21. Burton Jablin – Programmer at Scripps Networks, which owns HGTV
22. Fred Goodwin – Former chairman and CEO, Royal Bank of Scotland
23. Sandy Weill – Former chairman and CEO, Citigroup
24. David Oddsson – Former Prime Minister, Iceland
25. Jimmy Cayne – Former chairman and CEO, Bear Stearns


25 People to Blame for the Financial Crisis
Time, February 10, 2009

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