The blame game: let's get started!

We will be delving into pointing fingers for the world financial/economic crisis for many years – as we should. How else will we know what went wrong? There will be many, many culprits. But for starters, I would just like some perspective on these questions:

What would have happened if any or all of the following had happened:

• The rating agencies – Standard& Poors, Moodys – had rated the “tranches” of mortgage-backed securities honestly? Nothing is much more disgusting than a top manager at one of the agencies angrily telling one of the professionals simply to ignore the lack of understanding of how much risk there was underneath them -- an email exchange that has been posted on the Internet.

• Alan Greenspan had simply said in one of his Congressional hearings a few years ago that there was “irrational exuberance” in the housing market – i.e., that people were being encouraged to borrow on apparent wealth in their homes that may not be real over the long run? Think maybe “Flip This House” might have been moved to the 3 AM time slot after that? To me, though, Greenspan's behavior is easily explained: he knew perfectly well that teeny-tiny interest rates generating the house prices allowing credit to be expanded was the only thing proppoing up the economy during a Republican administration. He knew perfectly well that the fundamentals, like job growth, manufacturing jobs, wages, were for crap, but he wasn't going to be the one to spoil the party. Simple as that. I was pretty sure that was what was going on, and what the hell did I know compared to the experts at the Fed?

• The U.S. Office of the Comptroller under Bush had not gone out of its way, at the instigation of the big national banks, to prevent the attorneys general of the states from holding them to the same standards applied to local lending institutions to prevent deceptive lending practices?

• The New Deal-era Glass-Steagall Act -- maintaining the separation of the ho-hum activities we are familiar with that commercial banks do from the high-flying creativeness of investment banking -- had not been repealed? Clinton signed it, but it was Reaganomics all the way.