In an interview on 60 Minutes this evening, Obama blamed Wall Street bankers for the nation’s financial troubles. If I remember correctly, the question was asked if banks are repaying TARP funds so they could pay their CEOs big bonuses. To that, Obama said that he thinks that’s a motivation and that Wall Street still doesn’t get it that everyone is mad at them for causing the financial mess (paraphrased from memory).
What’s sad is that many American accept this explanation and we never hold government accountable for their role in the mess.
A true leader would own up to it. Wall Street certainly played a role in the financial crisis, but they by no means acted alone. This is where journalism needs to DO IT’S JOB!
Here are some great questions I would have loved to ask President Obama at that point:
1. Do you think the government or government agencies had any role in the financial crisis or did Wall Street act alone?
2. Do you believe the Federal Reserve should have acted quicker to remove excess money supply after it seemed that the economy got back on track after 9/11?
3. You don’t believe that government put pressure on banks to make credit easier (i.e. lend to people they would normally consider high credit risks) in order to push this idea of expanding home ownership?
4. Didn’t the government provide implicit guarantees to subprime lending, again to expand home ownership, through Fannie Mae and Freddie Mac?
5. Wasn’t Fannie and Freddie one of the largest, if not largest, provider of these bad loans? And weren’t they acting under direction from Congress?
6. Weren’t regulations proposed in 2004 that would have reduced the risk of the housing crisis by making it tougher to get loans, but those regulations were rejected by Congress because they would have interfered with the goal of expanding home ownership?
6. In order for us to better trust your leadership, shouldn’t we expect you to be honest about government’s role in the financial mess? Rather, you seem to pretend that government has not blame and we should continue to blindly trust the government as you want to expand regulatory power even further.
7. Please tell me, how are the new financial regulatory powers that your administration is proposing different from those in 2004? Why didn’t the current regulations not work to prevent the crisis? Did anyone in government not even recognize that a crisis was about to happen? If not, how can we trust those in government to recognize the next crisis?
8. What do you think about the people who borrowed well beyond their means? Shouldn’t they have acted more prudently? Shouldn’t we expect our citizens, who are provided thirteen years of education with a total valued at $150,000, to make responsible financial choices? Shouldn’t we expect them to be able to read and understand a loan document and do their homework about the realities and responsibilities that come with home ownership?
9. What personal finance advice would you give Americans?
10. Some say that people were motivated to borrow beyond their means because they felt that home prices were appreciating so rapidly that they could always sell the house and make a nice profit. In other words, they were borrowing on future hopes rather than their realistic income. Don’t you think that the government’s finances are reflecting that same behavior? We are borrowing beyond our means with the hope that the economy will grow strong and pay for it. Haven’t we learned our lesson here? Don’t we know how this story is likely to end?