The Financial Crisis: Time to Do No Harm

"James K. Galbraith, a professor of business at the University of Texas at Austin, said: "Deregulation has been the public faith of the financial sector since [Ronald] Reagan. Under Bush II, waves of predatory finance in housing were aggressively promoted by Alan Greenspan, by McCain's closest economic adviser Phil Gramm, and by so-called regulators who systematically subverted the public interest...Deregulation was the theme song of the Ronald Reagan presidency, epitomized by his assertion, "Government is not the solution, government is the problem."
--Trader Markets

The daddy will continue to discuss solutions to the final crisis, but today he is feeling a short but very important that was just sent to me. It is written by Verna, who is getting her doctorate in a few moments in Psychology, specializing in business ethics. The article is about the tendency of pundits and financial analysts to blame today's financial crisis on democratic presidential for encouraging the markets to provide mortgages to low-income and middle-income people. Check it out:

The Financial Crisis: Time to Do No Harm
by Verna Monson

In following the recent financial crisis and inevitable blaming, my stomach is roiling. The idea that Democratic presidents – going back to Jimmy Carter – are to blame, and not Republicans and business executives, for pushing through policies to make home ownership a reality for more lower- and middle-class Americans is a cheap political barb. The analysis runs something like this: Anyone foolish enough to have taken out a $300K mortgage with no down payment on a limited income shares equal blame with financial executives who instituted the policies permitting subprime loans. What is hard to stomach about this? Isn’t this also greed -- the same greed that Democrats have tried to pin on Wall Street executives and Republicans?

One could say it’s a simple matter of caveat emptor, buyer beware. Entering into a long-term financial contract where more than half of one’s monthly earnings go to pay down the interest on a mortgage is questionable judgment. But it takes two to close a risky deal. Highly paid and degreed individuals structured the financial policies behind these loans. What is their responsibility in this mess? If the well-known tenet of medical professionals ‑ “do no harm” ‑ undergirded the field of business and finance, could the subprime mess have been avoided?

We need to raise expectations of our nation’s business and political leaders. We want professionals capable of assuming greater responsibility – for more than just the business bottom line. We want professionals who can account for the impact of business on citizens and society – present and future. It is time for us to demand more from those whom we entrust to help us live well, throughout our lives, by safeguarding our investments. It is time for business executives and politicians to recognize the privilege that society has accorded them. With that privilege comes the duty to do no harm.