Thursday, January 27, 2011
Financial Crisis Avoidable
The verdict is in. The Financial Crisis Commission Panel has reported. The findings are not a surprise. "The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand, and manage evolving risks within a system essential to the well-being of the American public. Theirs was a big miss, not a stumble." Consumers took on far too much debt. Bankers took on far too much risk. Regulators did not regulate. The Federal Reserve failed to stem the flow of toxic mortgages, which it could have done. It was the free market gone awry. Greed prevailed. There was "a breakdown of accountability and ethics". We are currently in a nationwide debate about the role of government. We have just seen an example of 'smaller government'. Sometimes we need government to protect us from ourselves. The Democrats on the panel concurred with the findings. The Republicans did not. Business as usual. One phrase really stood out in this report - "failed to question". Enough said.