One of the largest financial crises in living memory, also called one great big Ponzi scheme, may be over, but the repercussions linger to this day. Whatever you want to call it, many people lost a considerable amount of wealth, forever changing the global economic landscape. But don’t worry – that doesn’t mean that all these problems are fixed or that the people responsible will not be punished. It just means that next time you can’t get a loan or increase your credit limit, the banks will have an excuse to charge more.
Who Started The 2008 Financial Crisis?
At the top of the “most unwanted” list is Martin Feldstein. He was an economics professor at Harvard University (maybe you’ve heard of it) and served as Ronald Reagan’s Chief Economic adviser. As a major architect in Reagan’s deregulation scheme, he certainly had a hand in designing the way the economy functioned. The may be the best thing or the worst thing ever, depending on individual political persuasion.
Some believe Alan Greenspan is also responsible, seeing that he was paid $40,000 to testify on behalf of extreme bank looter Charles Keating. Greenspan spoke of his “sound business plans” and “expertise.” Kind words that don’t typically come for free.
Robert Rubin, the Treasury Secretary and a former CEO of Goldman Sachs teamed up with Larry Summers to encourage Congress to pass the “Gramm-Leach-Bliley Act.” Afterward, he went and made $126 million as Vice Chairman of Citigroup.
Last up is Larry Summers, another former Treasury Secretary and Harvard economics professor(So what does this say about that place)? He was a key player in deregulation and helped create derivatives for trading on the open market. This derivative trading was a major contributing factor to the financial collapse of several companies
Companies and Their (Illegal) Activities
Giant financial corporations are perceived to spend many hours perfecting shady and downright illegal forms of business. It is a wonder these companies have any time left to do whatever they are actually supposed to do. The following are a few highlights of these actions:
JP Morgan: Allegedly bribed top government officials
Riggs: Laundered money for Chilean dictator Augusto Pinochet (a military leader – for those who don’t know – who led a coup in Chile and was said to have brutally crushed, killed or jailed all who opposed his illegal regime).
Credit Suisse: Laundered money for Iran in violation of US sanctions.
Freddie Mac: Accounting fraud related to collateralized mortgage obligations and other financial instruments.
Fannie Mae: Accounting fraud, including overstating their earnings by $10 billion over 10 years. Not exactly the same as slightly exaggerating your salary to impress someone at the bar.
ENRON: Fraud that they conspired to cover-up with the help of Citibank, JP Morgan and Merrill Lynch.
Of course, this is just the beginning. Review the infographic to see exactly how the economic crisis of 2008 occurred and you be the judge: who’s to blame? Are we out of the dark yet? And are we making the right choices now?Could this have been prevented?