Want to know who the real culprits, the bad guys, the”ones to blame” for America’s economic debacle/meltdown are? Well, come on, guys. I’m gonna name names. Some you are familiar with, and some I’m sure many of you aren’t. But indoctrinate these names in your memory, forever; because these are people that have changed millions, if not billions of lives. I give you, in no particular order, “America’s Most Wanted.” (I credit Time Magazine for a lot of this info.)
- Angelo Mozilo, the co-founder of Countrywide Mortgage. His company popularized offering mortgages to “iffy” borrowers. He left Countrywide after its sale to Bank of America, which later pledged to pay $8.7 billion to settle predatory-lending charges by 11 state attorneys general.
- Phil Gramm. Chairman of Senate Banking Committe 1995-2000. He championed deregulation. In 1999 he got his wish, repealing the Depression-era Glass-Steagall Act, which had separated commercial banks from Wall Street.
- Alan Greenspan. Could he have stopped it? Yes. Even though he led the US through the stock-market crash of 1987 & presided over the 1990′s economic boom, he decided on those low-low interest rates from the Federal Reserve. Many feel his disdain for regulation starting the mortgage crisis.
- Chris Cox, ex SEC chief. He repeatedly failed to investigate charges of fraud in the Madoff debacle, but his major crime was of negligence. He failed to rein in risky behavior on Wall Street, such as Lehman Brothers & Merrill Lynch.
- US, WE THE PEOPLE! We spent beyond our means and saved next to nothing. Household debt zoomed to 130% of income in 2007, up from 60% in 1982.
- Hank Paulson. He became Treasury Secretary in 2006 after leaving Goldman Sachs. He ran GW Bush’s economic policy almost single-handedly and could be called “Johnny-come-lately.” Too late now, folks. He tried to clean up the mess with a $700 billion bailout.
- Joe Cassano. He was a founder of AIG’s financial products unit, and knew the “credit-default swap” process well. We know how well that went, don’t we? When it was good, it was very, very good. When it went bad, it was a fiasco. So far, the US has invested $150 billion to keep AIG afloat.
- Ian McCarthy. CEO of Beazer Homes since 1994. He used agressive sales tactics and even used lying about borrowers qualifications to help get them loans.
- Frank Raines. Head of Fannie Mae. Need I say more? He took over Fannie in 1999 after being a Clinton Administration Budget Director. He left Fannie in 2004 during an accounting scandal and also at a time when it was making huge investments in the sub-prime mortgage market.
- Kathleen Corbet. Here’s a good one. She ran Standard & Poors, but put AAA seals on risky loans. Outfits such as Standards gets paid for their ratings by the bond issuer. Isn’t this a conflict of interest???
- Dick Fuld. He’s been called “The Gorilla of Wall Street.” He got $500 million during his time at Lehman, getting them in deep doo-doo with the sub-prime market.
- Marion & Herb Sandler. Head of World Savings Bank, the first to offer the ARM, or adjustable rate mortgage. Other banks followed suit. In 2006, they sold their bank to Wachovia, and took in $2.3 billion. But of course now we know Wachovia went under because of the bad loans, and was sold to Wells Fargo.
- Bill Clinton. He was a great fan of deregulation and his administration oversaw great prosperity in the country. His new rules added pressure to lend to low-income borrowers which later caused the housing implosion.
- GW Bush. He wanted tighter controls over Fannie & Freddie but allowed federal oversight agencies to ease off on banks and mortgage brokers.
- Stan O’Neal. CEO of Merril Lynch. He started Merrill’s collateralized debt obligations which were mostly made up of sub-prime loans. Merrill loaded up big-time, to the tune of $41 billion. Of course, Merrill is gone. Bank of America bought it.
- Wen Jiabao, leader of China and America’s biggest creditor. $1.7 trillion. He wanted to keep Chinese currency cheap compared to the US dollar, so China could keep exporting. But demand has now fallen for their goods.
- David Lereah. Head economist for the National Association of Realtors. He told everyone real estate would stay rosy and robust, and said the housing market could never fail. He did offer some concern in 2006, but was quoted in 2007 as stating: “it appears we have a bottom.” Wrong!!
- John Devaney. Hedge-fund maniac. He reaped in millions for a while, encouraging other companies to make “ugly” loans. In 2007, he told Money magazine consumers have to be “idiots” to take an ARM.
- Bernie Madoff. Ponzi schemer extraordinaire. Possible $50 billion loss to larger-incomers. This scheme was a combination of lack of diligence on the part of regulators and stupidity on the part of the “feeders.” He is now in prison.
- Burton Jablin. Now here’s an obscure one, but nonetheless a big contributor. Burton’s TV shows such as Designed to Sell, House Hunters, et al convinced homeowners to sink big bucks into their homes, which of course now they can’t sell.
- Sandy Weill. He started the first financial “superstore,” Citigroup. He acquired Travelers and Smith Barney. Weill’s rival banks followed suit. These huge banks are now one of the country’s biggest economic problems. They need to go back to handing out toasters to little old ladies with $100 to save.
- Jimmy “Asleep at the Switch” Cayne, head of Bear Stearns. Never in town, let alone in the office. He reportedly was usually off to some exotic locale in one of his helicopters. When he WAS in the office, his firm bought risky home loans. Two of its hedge funds collapsed, and eventually the firm was sold for less than the value of its building.
- Fred Goodwin. An “out of towner.” Fred, through a plethora of takeovers, steered Royal Bank of Scotland into the ground. As a result, the British government pumped $30 billion in the bank, the most in UK corporate history.
- David Oddson, another “out of towner.” Iceland’s prime minister, and then its central-bank-governor. He privatized three Icelandic main banks, made bad decisions, and now Iceland’s economy is toast. Now the IMF has stepped in after the currency lost more than half its value.
Congratulations to you all!!
