Polemics & Exchanges

Who's To Blame?

I thoroughly dispute Mark G. Brennan’s thesis in “The Borrowers’ Crisis” (Vital Signs, November) that it was the borrowers who were mostly to blame for “the crisis.”

How did the party-of-the-first-part—those lending and mortgage-financing institutions—get away with making loans to uninvestigated potential borrowers, uncollateralized borrowers?  Where were the state and local regulators?  Where were the accountants?  Where were the auditors (internal and external)?  Where were the federal regulators?  Where were the unconscionably overpaid CEOs and bank presidents?  How can it be possible for so many to have been derelict in their duties without there having been some Enron-Arthur Andersen playbook in operation?  The probabilities for so much mal- and misfeasance to have occurred for so long without recognition of the potential of devastating consequences are 1 in 10 to the 10,000th power.

Borrowers, small and large, speculators, small and large, could not have gotten a red cent from lenders if the institutions involved had not allowed it to occur with full knowledge of their probable inability to repay their loans, but through all their “clever” maneuverings and exotic packagings and bundlings (“insurings”?) these institutions thought...

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