Main Street Should Share Blame

By Tom Granahan, M&A Magazine

September 29, 2008

Dial this up as yet another facet of the financial crisis I just don't understand: Why are "the taxpayers" the victims in this debacle?

I keep reading about how bad it is that we're on the hook for a trillion or so, how Paulson is a commie, and how "Wall Street" and the people who work there add up to nothing more than a pile of garbage.

As we were putting the Sept. 29 issue to bed, the government had just wrapped up a preliminary deal on its $700 billion package. Let's hope the damage stops there, and indeed there may be hope that the spending will be somewhat contained, as the House just voted against the bailout. But there will be other votes, and as we no doubt get ready to hear more ranting and raving about how "the taxpayers" are getting ripped off, more important would be to remember this: It's "the taxpayers'" fault.

When a Senator from Utah says his constituents are telling him "not to support that $700 billion bailout" it tells us one of two things: 1) Utah is the only spot on the planet where ill-qualified, greedy, jealous-of-their-neighbor residents didn't secure a mortgage they knew they had no earthly chance of paying back if things went even slightly awry; or 2) The folks who live there have no idea what this is all about.

"Wall Street" didn't do this, we did. We may have had some accomplices who made it easier, but we did it.

The time has come to stop this nonsense. When you whittle away the CDOs, CLOs and all the other confusing acronyms, and end the practice of lumping all of the Street into the category of criminal, you're left with the fact that we're in the tank because Main Street can't repay its debts. Yet Main Street wants to share no blame in this mess. How typical these days; get into trouble, then blame everyone but yourself. It's akin to the perp who kills his own parents and then complains that he's an orphan.

Not that there's a shortage of blame to go around; many of the mortgage brokers, who for some reason seem to have escaped much scrutiny in the political debate, need to take a hit here, too, although many who were making three hundred grand a year to answer the phone are now probably working at Dick's Sporting Goods earning considerably less. Maybe that's punishment enough?

Look, the bulge-brackets' risk management policies were worse than abysmal, and plenty of folks on the Street will be passed over for sainthood, but we made our own bed. Time to live with it, even if we have to do it in a much smaller house.

Thomas Granahan
thomas.granahan@sourcemedia.com