Who is Responsible for the Financial Meltdown?

Who is Responsible for the Financial Meltdown?

The media always does a poor job when allocating responsibility for the cause of the financial meltdown.

Example: The left-leaning nature of its pundits make it easy to assign blame to “greedy” Wall Street. Yet, there is a bottom line culprit to all this that differs from this accepted shibboleth.

Nothing really so drastic would have happened to cause a severe recession if the Federal Reserve did not make interest rates so low in the early years of this 21st century. With money so cheap, business people and investors did what they are meant to do–trade and invest with the cheap dollars.

The federal government politicos pushed for home ownership by those who ordinarily could not afford and should not have bought those homes. And at the same time the government gave a monopoly to several rating agencies who provided dubious AAA ratings to bonds backed by those highly risky, “toxic” mortgages.

By the way, in its suggestions for future regulations, the current government is continuing the monopoly for these rating agencies.

There is an alternative market-related method that can give more accurate ratings to bonds but this left-leaning Administration is not market-oriented and will thus continue to be mired in the past, basic problem.