Posted by JM Ashby
The Financial Crisis Inquiry Commission which was appointed to investigate the root causes of the financial meltdown of 2008 has released the final report detailing their conclusions and more specifically, who to blame. The results were not exactly bi-partisan. Imagine that!
The crisis could have been avoided, the Financial Crisis Inquiry Commission determined in a final report released Thursday that was only supported by Democrats on the panel.
...The Bush and Clinton administrations, the current and previous Federal Reserve chairmen, and Treasury Secretary Timothy Geithner all bear some responsibility for allowing the crisis to happen, the panel said.
It also criticized bankers who got rich by creating trillions of dollars in risky investments. The deals grew so complex that bank executives and regulators did not understand them, the report found, and banks discouraged aggressive oversight of their activities, saying the government's interference would stifle financial innovation.
In a dissent, three Republican commissioners blamed a global credit bubble fed by low interest rates. A separate lone dissent blamed policies aimed at promoting homeownership, including the government's support of Fannie Mae and Freddie Mac.
Is this multiple choice? Can I select D for All of the above?
How can future bubble-burst cycles be avoided if we can't reach a unanimous agreement on what caused the previous one? The report echoed this sentiment:
"The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done," the report said. "If we accept this notion, it will happen again."
Conservatives, meanwhile, would have you believe that virtually non-existent government regulation is the problem not the antidote. If only the government would stay out of the way, the free market would take care of every eventuality.