by Henry Oliner

Many attribute the financial crisis to pure greed. I disagree.

There is always greed. In fact the market tempers greed with open information, transparency, and competition: three items missing from Fannie Mae.

If we keep insisting that the market and capitalism and greed are the culprits we risk a repetition of this fiasco. Yes there was greed that was set loose from the restraints of the market, creating derivative swaps and collateralized mortgage obligations that few understood.

I share the outrage at the companies that were still paying outrageous bonuses while they sought a government bailout. I hope the shareholders sue them into a soup kitchen.

But the factors that usually check unbridled greed were blocked by the Congress. They refused to acknowledge the problem in face of reports of mismanagement and against the warnings of Alan Greenspan and John McCain among many others. They refused to believe that they could not create something from nothing. They refused to acknowledge that their programs had a cost that someone had to bear.

And where is the absolute outrage at Frank Raines’ 90 million dollars in pay. He was their posterboy for successful government programs. He committed fraud and Congress was his enabler and accomplice- he should be in prison.

Our government consistently fails on two fronts.

They consistently refuse to say “no” to worthwhile programs they can not afford.

They consistently want to provide programs that they are not willing to pay for. (Social security, home ownership for the poor, healthcare)

Both of these failings cost us far more than all the greed that Wall Street can muster.

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