I still have dreams of being a filmmaker. Though I want to be a narrative filmmaker, I do wish I could produce a documentary series titled, It’s Not That Simple. We would take issues in the news and instead of trying to make them simple, we’d show how complex they actually are. My first idea for this came from the “Obesity in America epidemic” stories that are frequently in the news, but the Occupy Wall Street movement would be another great episode.
I’ll deal with the obesity issue later, I’ve been writing that post for a while (I’m trying to trim it down to a single post), but to be more topical I’d like to talk about the Occupy Wall Street movement, or rather the reactions to it. On twitter, Facebook, podcasts, news, etc. there are a lot of different reactions to OWS. Some support, some condemn, and some think they’ve got a few good points, etc. etc.
From what I gather there are those who blame:
- Wall Street
- The banks
- The Government
Then there are those who think the OWS people should take more responsibility for their situation and stop blaming others.
It’s been my experience in both school and business that things don’t usually have a single cause.
People are simple. They like simple answers. You don’t have a job and I do, you must be lazy and I’m hard working. The banks aren’t to blame for the housing crisis, it’s the people who bought houses they couldn’t afford.
This is a complex situation and from the looks of it we’re all to blame.
Why it’s Wall Street’s fault. Credit Default Swaps weren’t invented by “the people”. Poor people who got college degrees in subjects like Art History didn’t bundle mortgages and sell them. That was Wall Street. The volatility of the markets also cost people their 401ks. But it’s not all their fault.
Why it’s the bank’s fault. I tried a few years ago to get a loan from my credit union for a used car and they turned me down (I built up my credit and last year they approved me for a new car loan). It’s fun to blame the people who bought houses they couldn’t afford and say they only have themselves to blame. But, why did the Banks approve those loans? A person with no income and no assets should not be ABLE to get a loan for a house, but it was in the bank’s best interest to approve as many people as possible. The banks were making money by selling off bundled mortgages and you can’t do that if you don’t have enough mortgages to bundle. So the banks kept racing to the bottom and they created NINA (No Income, No Assets) and approved loans under this criteria. There were also numerous cases in which banks falsified incomes to get loans approved, because the motivation was to get as many mortgages approved as possible. But it’s not all their fault, either.
Why it’s the Government’s fault. Lot’s of people were blaming Fannie Mae and Freddie Mac. They helped low income people get approved for loans. They helped create mortgage backed securities. But the other reason government is to blame is that they, through deregulation and non-enforcement of rules, allowed both Wall Street and the banks free reign to create these toxic assets. Credit default swaps and the mortgage crisis were the Free Markets at their worst. To make matters even worse when it finally blew up in their faces, the Government bailed them out, no strings attached. And yet, they’re not the only ones to blame either.
Why it’s our fault. There were people who bought houses they couldn’t afford. There are people who go to college to get degrees that won’t get them employment. But beyond that, we don’t hold elected officials accountable for their actions. We continue to give money to the banks and corporations that got us into this mess. We don’t really study issues to make rational decisions. We look for simple answers to complex problems. We listen to only those who agree with us and ridicule/demonize those who don’t. We’re a major part of the problem. (It should also be noted that banks and Wall Street are made up of people. They make the same stupid decisions as everyone else.)
In this crisis we pick one of the above to point to as the problem (and there are even more factors that I didn’t mention) and when someone suggests it’s another of the above, we argue and say they’re wrong. We don’t listen and just push our point of view. We can’t arrive at solutions if we don’t look at all the causes. The reason you get into a car accident may be because some guy slammed on his breaks in front of you. But it can also be because you were following too closely, and he was talking on a cell phone, and that it was rainy, and a whole host of other reasons. Picking one won’t solve the problem. Paying attention to as many as possible will. When it’s raining, leave more space between you and the guy in front of you. That won’t solve the problem of the guy talking on his cell, but you’ve taken into account two variables and have decreased your chances of getting into an accident. Isn’t that what’s important? Shouldn’t we apply that same logic to the financial mess we’re in.
Wall Street should get stricter regulations that are overseen by people with real power to take action. The banks should realize that if they make poor decisions they’ll have to live with them, same as we expect Art History major to live with his. The Government should realize that it’s the only entity large enough and with enough power to actually regulate these industries and it should do so. Politicians should work to actually solve problems rather than get elected. The people should take a more active role in electing officials and should pay closer attention to what these elected officials do. People should also learn to take more responsibility for their actions. We should also work harder to educate people and ourselves about how the system works.
We live in a complex world and complex solutions are sometimes the only way to solve our problems. If you only settle for easy answers you might find that not only do you not solve the problem, but you might actually make it worse.