The Economic Crisis: Can We Really Blame Any One Person or Group?

In recent weeks -- in light of failing banks, tight credit, volatile markets, expensive interventions and a very uncertain economic future -- many have focused on the past: Who can be held responsible for the current economic crisis? The banks? Members of Congress, who should have voted for more regulation? The Fed? Greedy investment bankers? Shady mortgage lenders? The Democrats? The Republicans? The president? Some even have gone so far as to lay the blame on individual congressmen.

But is it really so cut and dried? How can such a complex and extensive group of economic problems possibly be the fault of only one person or organization?

I’m not an economic expert, but somehow I doubt that the root of our economic crisis today can be found in the actions of one or a small group of people. I also find it hard to believe the possibility that the fault all lies with one particular political party, or the failure of a particular political party to take action on one or more issues, such as the failure of the Democrats, cited by President Bush, to agree to drill in ANWR.

And yet, at the same time, I’m not convinced that the Democrats or Republicans in Congress are completely blameless either. True, Wall Street CEOs have encouraged a lot of risky investing in the recent past, but don’t we also have to hold those who were supposed to be regulating them responsible as well?

The most recent round in the blame game has focused on Alan Greenspan, the former Federal Reserve chairman. Greenspan, who went before the House of Representatives Committee on Oversight and Government Reform on Thursday to answer some questions about his time as Fed Chairman, has faced rising criticism from politicians and the public. Though he admitted that he must bear some of the responsibility for our current economic situation, his admissions are more related to a certain flaw in judgment. Mr. Greenspan says now that he “made a mistake” when he believed that free markets could regulate themselves.

But can we really say that the fault all lies with the lawmakers or the banks? At the moment, there’s hardly any recognition of responsibility on the part of ordinary Americans (the exception perhaps being SNL), who made bad judgments about their own personal finances and what they were actually in a position to pay for.

At the end of the day, we can’t fairly blame any individual or any single group for an economic crisis that is so complicated that it’s hard to even determine all the contributing factors. All we can do is try to remedy the situation and make sure that we restructure our system in such a way that we don’t see a repetition of this combination of factors.