Butch Mazzuca: Quit the blame game
Theres an awful lot of finger-pointing going on these days with politicians and pundits using buzz-words such as greed, lack of oversight, and no accountability. However, the truth of the matter is that the current financial meltdown is so convoluted and tortuous that drilling down to root causes is a veritable impossibility. There are just too many moving parts and inter-related facets to the problem that have gone unaddressed for so long its now nearly impossible to ascertain specific responsibility.An analogy can be drawn from the legal profession regarding a rule of law applied in accident cases. Comparative negligence is the legal term used to determine responsibility and damages based on negligence when there are multiple parties involved in an accident. For example, driver A is speeding toward an intersection while the driver B fails to signal and starts to turn left into driver As path. Because driver B misjudged the speed of driver A, a crash ensues and driver B is injured. By law, driver Bs damage recovery will be reduced by the percentage that he or she is judged to have contributed to or caused the accident.Unfortunately, accident cases usually arent quite that simple, and the formulae to ascertain, attribute and compare negligence are frequently problematic, difficult, and in many cases, totally subjective. This same concept can be applied to our current financial meltdown. From one sector well hear its the greedy bankers fault, some insist the problem was lack of Congressional oversight beginning with the Clinton administration and its Republican Congress. Still, others feel its the Bush administrations fault with partial blame going to the Democrats who controlled the Senate Banking Committee for the last two years when we first started to hear rumblings of the problem. But two things are certain. No one is going to take responsibility for the current financial mess in an election year, and attributing comparative negligence is impossible. Michael Barone, senior writer for U.S. News & World Report, illustrates how our economic problems are concentrated in the finance sector, the one part of the economy the average voter knows least about. He opines that Bill Clinton, George Bush and both Democrats and Republicans in Congress have pushed policies to increase home ownership. But the unintended consequences of those policies were that many marginal home-buyers found themselves unable to pay their mortgages when house prices fell.Meanwhile, author, lawyer and political commentator Neal Boortz wrote an op-ed stating that politicians want us to believe the blame rests squarely on greedy mortgage brokers and lenders; and perhaps theres a degree of veracity to that theory. However, Boortz also contends that most of the blame rests on political meddling in the credit decisions of mortgage lenders, as evinced by the following abstract from that op-ed.Twenty years ago, the buzz-word in the media was redlining. Newspapers across the country were filled with hard-hitting investigative reports about evil and racist mortgage lenders refusing to make real estate loans to various minorities and to applicants who lived in lower-income neighborhoods. But the reality was that when credit histories, job stability, loan-to-value ratios and income levels were considered there was no evident racial discrimination. So did political correctness win the day and did Congress make it clear to banks and other lending institutions that if they didnt do something to bring more minorities and low-income Americans into the world of home ownership there would be a heavy price to pay? No one can say for certain, but there is compelling evidence the hypothesis has merit.Some tell us this is a failure of market economics. Others insist were witnessing the collapse of Gordon Gecko (Greed Is Good) capitalism. But the one certainty is that for years Americans have spent more than we earned. Our savings are among the lowest in the world while our credit card, consumer, auto and mortgage debt are the highest, which means that some responsibility must rest with those unqualified home buyers who made bad decisions and lived beyond their means.Theres more than enough blame to go around, but the blame-game is a losing proposition. Now the question becomes which pair of candidates is best prepared to respond not only to this crisis as it unfolds in the months and years ahead, but to future events as well? McCain, Obama, Palin and Biden are human; each with human foibles, biases and blind spots. Thats why its critically important to gain a measure of each candidates modus operandi, their character, experiences (both within and outside of politics), and how past associations and mentors have influenced their thinking. Its also important to understand how their spouses might influence them; and it goes without saying that voters must examine the candidates respective accomplishments and voting records. What the wise voter should take from all of this is that neither party is the cause of all our problems, nor will one party provide all the solutions. But perhaps the greatest lesson to be learned is that pointing fingers and playing gotcha politics in this matter will solve nothing. Quote of the day: We cannot direct the wind but we can adjust our sails.Butch Mazzuca is a business consultant and writes weekly for the Vail Daily. He can be reached at firstname.lastname@example.org.
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