Wednesday, April 28, 2010

Who Was Responsible For Our Current Financial Crisis?

Who Was Responsible For Our Current Financial Crisis?

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It took decades to get the U.S. into the current financial crisis, but there is little doubt that the policies and actions of the George W. Bush administration catalyzed our nation into the deepest national debt ever recorded in US history. With such enormous debt comes great responsibility. President Barack Obama picked up where Bush left off and is trying to make critical changes, some of which have significantly furthered our national debt and has divided Congress from performing in the best interests of the American people. Exactly who is responsible for our monumental financial crisis is a question that should be appropriately answered.

The financial problem began with the corporate/military complex purchasing the best government money can buy. Extreme wealth and power still manages the direction of our nation. On January 17, 1961 former President and highly honored WWII General Dwight D. Eisenhower tried to warn the American people in his Farewell Address against the establishment of "a military-industrial complex" that would rise up to determine the direction and would enforce the management of our nation's future. According to Eisenhower:

"A vital element in keeping the peace is our military establishment. Our arms must be might, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction. . . . American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. . . . This conjunction of an immense military establishment and a large arms industry is new in the American experience. . . .Yet we must not fail to comprehend its grave implications. . . . In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist."

Eisenhower was correct and we are fighting currently to stay above water Several things occurred during the past decade that misdirected our economic growth. It began with the Republican and Democratic Congress that accepted the wealthy campaign contributions and perks from the power hungry ultra-capitalistic and greedy for profit corporate sector. A second precursor to increased consumer spending was the easy credit made available via credit cards and the easier acquisition of home mortgage loans. A third responsibility fell upon our government again when it provided little if no reality-based oversight of the financial sector as it continued the above mentioned free-wheeling and "throw caution to the wind: activities.


What resulted with the easy credit is that people started to find themselves in deeper debt. At first the debt increased slowly until the credit cards and mortgage debts became too much to pay-off and what further caused economic and fiscal damage was increasing percentage rates. Simply stated, things "got out of hand". Consumers lost control over their financial lives and the corporate sector lost control by incurring huge debts as people could not repay their loans and card credit balances and was further generated by failed investments. Suddenly there were record breaking numbers of home foreclosures and across the board increased debt. Then businesses started laying off workers to find cheaper labor to cut costs by outsourcing American jobs. Suddenly, there was an unemployment crisis adding to the financial chaos, after which illegal ponzi schemes added to the chaos.

Then additional responsibility fell upon the corporate sector and government as during the last days of the Bush administration the big financial corporations pleaded with the government for their socialist taxpayer bail-outs. Apparently hands-off capitalism was the theme for the past decade when companies were raking in huge profits, but now that the financial markets were crumbling, corporations shifted their cry from capitalism to socialism. Obama added to the mix by promoting taxpayer bail-outs for the auto industry. Adding to the financial chaos was the ongoing and escalating costs of our daily living expenses, which included overpriced and inadequate coverage of health care for all Americans.

In closing, the responsibility for the current financial crisis in the U.S. falls upon many people, institutions and government. From the financial sector that provided loose credit to the consumers who couldn't pay off their credit and loan balances; from the greedy corporate sector that spent billions overseas for increased profiteering to manufacture the articles, implements and ammunition for various wars and to profit from them, while government provided billions of taxpayer dollars for corporate contracts and stepped on and over Americans who were quickly slipping out from the middle class into the poor unemployed sector. If we look to point a finger at the responsible and irresponsible parties who caused our current financial crisis, that finger would be directed at all of us.

Peter Stern, a former director of information services, university professor and public school administrator, is a disabled Vietnam veteran who lives in Driftwood, Texas.

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