- The Big Picture - http://www.ritholtz.com/blog -

No Financial Villains . . . ?

Posted By Barry Ritholtz On July 13, 2009 @ 10:00 am In Bailouts | Comments Disabled

>

“But financial meltdowns don’t offer villains, for the simple reason that no one person or even one group is powerful enough to take down a whole system.”

-Megan McArdle [1]

>

I don’t really get Megan McArdle [1] when she makes a statement such as the one above. It was in an article critiquing Matt Taibbi and defending Goldman Sachs.

Um, Megan, I am going to have to beg to differ with you. There were many, many identifiable villains who through their own action and inaction, helped create the crisis. There were people who remained slavishly  devoted to an outmoded and disproven ideology, which led them to decisions that were indefendable. Some people engaged in utter recklessness when it came to risk management, or such gross irresponsibility that they are not merely morally culpable, but legally also. Then there are those regulators who gave the corporate interests they supervised pretty much everything they asked for.  And of course, the people simply trying to grab a free lunch contributed mightily to the collapse.

I have 322 well researched pages [2] that shows as much.

Goldman Sachs was but one of the 5 biggest investment banks that requested from the SEC, and received, an exemption from the net cap rules. This allowed their leverage to balloon from 12-to-1 to as much as 40-to-1.

As a nation, we need to stop pretending this is “too complicated” and start holding the responsible parties accountable . . .

>

Previously:
Who is to Blame, 1-25 [3] (June 29th, 2009)

http://www.ritholtz.com/blog/2009/06/who-is-to-blame-1-25/

Stop the “Blame Game” ? [4] (June 15th, 2009)

http://www.ritholtz.com/blog/2009/06/stop-the-blame-game/

Source:
Matt Taibbi Gets His Sarah Palin On [1]
Megan McArdle
The Atlantic, Jul 10 2009

http://business.theatlantic.com/2009/07/matt_taibbi_gets_his_sarah_palin_on.php


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2009/07/no-financial-villians/

URLs in this post:

[1] Megan McArdle: http://business.theatlantic.com/2009/07/matt_taibbi_gets_his_sarah_palin_on.php

[2] 322 well researched pages: http://www.amazon.com/exec/obidos/ASIN/0470520388/thebigpictu09-20

[3] Who is to Blame, 1-25: http://www.ritholtz.com/blog/2009/06/who-is-to-blame-1-25/

[4] Stop the “Blame Game” ?: http://www.ritholtz.com/blog/2009/06/stop-the-blame-game/

Copyright © 2008 The Big Picture. All rights reserved.