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Time Magazine: 25 People to Blame for the Financial Crisis

By Brian | March 5, 2009 | Share on Facebook

A few weeks back, Time Magazine published a list of the 25 People to Blame for the Financial Crisis, in which it details the 25 people (or groups of people) that it considers most “blameworthy.”

Unfortunately, it’s website requires you to click “Next” twenty-five times to see the entire list, which is pretty inconvenient. So, as a public service, here’s the complete list:

  • Angelo Mozilo, co-founder of Countrywide and IndyMac. Made predatory lending into a big business.
  • Phil Gramm, chairman of the Senate Banking Committee from 1995-2000. Repealed the Glass-Steagall Act in 1999 and modified the 2000 Commodity Futures Modernization Act to exclude OTC derivatives from CFTC regulation.
  • Alan Greenspan, chairman of the Federal Reserve, 1987 – 2006. Kept interest rates low through the booming 90s.
  • Chris Cox, chairman of the Securities and Exchange Commission, 2005-2009. Didn’t catch Bernie Madoff or sufficiently police the I-Banks.
  • American Consumers, borrowed up to 130% of their income by 2007.
  • Hank Paulson, Treasury Secretary, 2006-2009. Let Lehman fail, mis-managed the original bailout bill/TARP program.
  • Joe Cassano, founding member of AIG’s financial products unit. Made Credit Default Swaps big business, beginning in 1987.
  • Ian McCarthy, CEO of Beazer Homes since 1994. Admittedly violated regulations to get loans for unqualified borrowers.
  • Frank Raines, CEO of Fannie Mae, 1999-2004. Presided over a massive accounting scandal and kicked off investments in sub-prime mortgage backed securities.
  • Kathleen Corbet, President of Standard & Poor’s, 2004-2007. Assigned questionable ratings to CDO products that are now “toxic assets.”
  • Dick Fuld, CEO of Lehman Brothers, 1994-2008. Got Lehman into the MBS business, presided over it’s demise in September of 2008.
  • Marion and Herb Sandler, owners of World Savings Bank, who invented the adjustable-rate mortgage (ARM) in the early 1980′s.
  • Bill Clinton, 42nd President of the United States, 1993-2001. Presided over the repeal of the Glass-Steagall Act, signed the Commodity Futures Modernization Act and the Community Reinvestment Act, which pressured banks to lend in low-income neighborhoods.
  • George W. Bush, 43rd President of the United States, 2001-2009. Embraced deregulation, didn’t get Congress to control Fannie Mae and Freddie Mac, signed the Sarbanes-Oxley Act, blocked additional regulation of mutual and hedge funds.
  • Stan O’Neal, CEO and Chairman of Merrill Lynch, 2003-2007. Got Merrill into the CDO and MBS businesses.
  • Wen Jiabao, Premier of the People’s Republic of China, 2003-present. Purchased copious amounts of U.S. Government debt.
  • David Lereah, Chief Economist at the National Association of Realtors, 2001-2007. Recommended real estate as a sound investment, despite the bursting bubble.
  • John Devaney, Hedge Fund Manager and buyer of more than $600 million in mortgage-backed securities.
  • Bernie Madoff, purveyor of a $50 billion Ponzi scheme that bilked many of the rich and famous.
  • Lew Ranieri, Salmomon Brothers bond trader. Inventor of mortgage backed securities in the late 1970′s.
  • Burton Jablin, head of programming for HGTV. Created programs that taught homeowners how to extract value from their homes.
  • Fred Goodwin, CEO of the Royal Bank of Scotland, 2000-2008. Strained RBS’s capital reserves through acquisition, leading to a government bailout.
  • Sandy Weil, CEO of Citigroup, 1998-2003. Lobbied for the repeal of Glass-Steagall, formed the first “universal bank” (Citigroup) by merging Salomon Smith Barney, Travelers and Citibank.
  • David Oddsson, Prime Minister and Central Bank Governor of Iceland, 2001-2009. Privatized Iceland’s banks and presided over a “macroeconomic meltdown.”
  • Jimmy Cayne, CEO fo Bear Stearns, 1993-2008. Over-leveraged Bear Stearns and presided over it’s rescue/sale to JPMorganChase.

While the connection of some of these folks to the Current Financial Crisis(TM) range from obvious to tenuous, I generally like the list because it highlights the fact that “blame,” to the extent we need to find it, belongs with a large number of people across many industries.

It’s a welcome refresher from the “bash the banks” mentality that seems to have saturated our media and our leaders over the last couple of months.

Topics: Money Talk, News and/or Media | No Comments »


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