Who’s to blame?

No snowflake in an avalanche ever feels responsible.
-Voltaire

Wise words from a wise man. I think Voltaire touched on a very important point. In an avalanche, who’s to blame? Each snowflake can say about himself, “Look at me. I’m too small to do any damage. It’s not my fault.” And who’s really going to argue with it? But put all those snowflakes together and you get an avalanche capable of massive destruction.

Our country has been going through a crisis for over a year. And wouldn’t you know it, the second recovery begins to appear around the corner, the finger-pointing begins. Well, let me correct that. Finger-pointing is the oldest human art dating all the way back to the first guy to have fingers (remember Adam, anyone?). And since the beginning of the recession, blame has been tossed around more than a tossed vegetable salad.

But now things have started to get serious. The blame comes with punishments, and harsh measures. It’s not just a question of who’s responsible for the crisis, the unemployment, the homelessness, but rather, who’s going to pay for it.

Obama has decided that the blame lies with the banking industry. Admittedly, it’s a bigger snowflake than most in the avalanche. And Obama’s plan which I’ve written about before is to make the largest Wall Street banks repay what the bailout cost the government. That’s assuming all the hundreds of billions in loans get repaid. But the bottom line is that $117 billion is supposed to come out of Wall Street over the next ten years.

Now, I’ve been listening to word on the street and most people I’ve talked to seem to think the other sectors of the economy should shoulder some of the financial burden. Fannie and Freddie, for instance, are frequent targets of the finger pointing we talked about before. And they’re certainly largely responsible for the current crisis. Maybe they should be penalized in some way.

But let’s think about this seriously. The two organizations together guarantee about half of the mortgage market. The wisdom of their investments is suspect, but how effective will monetary punishments be? The housing market needs to look at them as points of stability, not as suspects. If Washington starts clamping down on all the Mae’s and Mac’s out there, who’s going to fill the gap?

People aren’t going to have confidence in the housing market. Investor confidence is already through the floor. Any more shake-ups or impressions of weakness are going to just make the recovery that much harder.

But that’s just one opinion and I’m sure all you folks out there have more to say on this issue.

So let me hear from you. And have a great weekend!