Politics: the blame game

The bailout bill was defeated yesterday. Here is the roll call.

Whether this particular bailout package was a good option or not is a separate issue but of course, the media blame the House Republicans.

Indeed, 133 of the no votes came from the GOP side of the House. However, the reality is that 95 Democrats cast no votes as well. Thus, the instant blaming of the House Republicans doesn't tell the whole story.

As for the blame game for the whole financial mess to begin with, it has landed on the Republican doorstep as well.

Again it is more complicated as both sides wanted more "affordable housing" made available. By loosening lending criteria, the affordable housing problem was "solved" by making the mortgage lending problem which has snowballed into what we have now.

Good intentions, bad consequences.

UPDATE: Check out this item that spreads the blame pretty much everywhere. Excerpt:

So who is to blame? There's plenty of blame to go around, and it doesn't fasten only on one party or even mainly on what Washington did or didn't do. As The Economist magazine noted recently, the problem is one of "layered irresponsibility ... with hard-working homeowners and billionaire villains each playing a role." Here's a partial list of those alleged to be at fault:
The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.

Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.

Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.

Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.

The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.

Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.

Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.

Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.

The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.

An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.

Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.

The U.S. economy is enormously complicated. Screwing it up takes a great deal of cooperation.