History’s Great Villians
I’d like to echo Ezra Klein’s thoughts on Michael Lewis’ Vanity Fair piece on A.I.G./Joe Cassano. I was thinking about this on Saturday as I worked my way through Megan McArdle’s response to Matt Taibbi’s Rolling Stone article on Goldman Sachs.
The problem with pointing the finger at one person (or organization) as the cause for something as big as the worldwide financial crisis is that in doing so, it excuses the actions of thousands, if not millions, of people who, in their own way, contributed to the current situation: the prospective home buyers who borrowed well beyond their means; the loan officers who failed to do their due diligence; the “quants” who devised all sorts of exotic new ways to trade assets; the incurious bank executives who didn’t know what kind of things were being bought and sold in their name; the regulators who allowed the system to get so large and complex that few understood what was actually going on; everyone for believing that home prices would continue to rise, etc.
Passing the buck is nice because people can rationalize their involvement by saying it was somebody else’s fault or that they were just doing what they were told, but nobody learns a lesson that way.