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Vital Signs

The Borrower's Crisis

Like the mindless day traders of the 1990’s who piled into the same hot internet stocks, today’s commentators on the causes of 2008’s residential-real-estate implosion have exhibited a similar obtuseness regarding the workings of financial markets.  One will search in vain for any article that identifies a party other than Wall Street or large commercial banks as the primary villain in the crisis.  Writing in the New York Review of Books on August 19, Frank Rich cited “the widespread conviction that the White House tilts toward Wall Street” at the expense of “those who suffered most in the Great Recession”—i.e., average Americans.  Jonathan Alter, in his recent biography of President Obama, identified a “colossal injustice” resulting from the real-estate collapse and subsequent recession.  Alter furthered the anti­finance narrative as he predicted that “wealthy bankers” would be made whole for their real-estate losses while average Americans would be left footing the bill.  Even Chronicles writers have joined the populist crusade to blame the titans of finance.  “The big banks . . . caused the trouble” read the August American Proscenium (“How To Succeed in Banking Without Really Trying,” William J. Quirk), which pointed the finger at Wall Street as the root cause of our current troubles.

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