Is lack of people accepting personal responsibility at the core of the financial crisis?

I think you hit the nail on the head. Home buyers buying more home than they could afford and blaming the banks. Banks making loans to borrowers they knew could not make payments but knowing they had what they thought was every increasing collateral. Politicians ignoring the warning signs within Fannie Mae and then shamelessly blaming others. Corporations (AIG) making terrible business decisions, both in their underwriting and investment choices and then having no shame asking for an $85B, wait $123B, bail out.



People, corporations, politicians. None taking personal responsibility fort what they did, but trying to blame someone else and accepting billions from responsible people to help bail them out. Pitiful and a path to the end of this once great country. Is lack of people accepting personal responsibility at the core of the financial crisis?Its a part of it but I would say the 2 main causes for this mess are:



1) Years of failed government programs - wellfare - social security - ect



2) Greed - what goes up must come down and the market was bound to pull back with the ridiculous rate that it went up. Bail outs and helping these greedy people is just prolonging the markets need to balance itself and adjust to actual value, instead of the inflated value that was created through the greed.Is lack of people accepting personal responsibility at the core of the financial crisis?I don't think the reasons are that simple. Yes, there are some people who do not take financial responsibility, but they are not the reason for the financial crisis. There were many contributing factors.



First, since the 1920s, credit has become widely available, easy to acquire and relatively cheap. Over time, consumers have relied more and more on credit to supplement their spending capacity. In time, this access to credit caused the prices of consumer goods and housing to rise beyond the financial capacity of many Americans.



The mortgage crisis was precipitated by something that happened following the S%26amp;L crisis in the late 1970s and early 1980s. Until then, when a financial institution made a loan, they had to perform appropriate underwriting (determine the credit risk) because they held the loan until it was paid off. If they made a bad credit decision, they lost money when the loan was not repaid as agreed.



When interest rates hit the upper teens in the late 70s, all the S%26amp;Ls were holding long-term mortgages yielding around 6 percent. They were undercapitalized because of bad tax policy in the 1950s (bankers succeeded in getting mutually-held organizations taxed) and could not sustain the temporary problem of high interest rates. So, the regulators in their infinite wisdom encouraged institutions to package and sell their mortgages on the secondary market to investors. This change had the effect of separating the lender from the risk. The credit risk was passed along to the investors.



Don't believe the myth that Fannie Mae and Freddie Mac caused this crisis. Subprime lending was the domain of private lenders. Fannie Mae and Freddie Mac dealt in conventional mortgages.



Once the subprime mortgages started defaulting, investors no longer wanted to buy mortgage backed securities. Since all the financial institutions depended on being able to securitize and sell their loans, a liquidity crisis emerged when they could no longer sell the loans and lend the money to new borrowers.



And, since financial institutions have to mark their assets to market, the loans they carried (their assets) became nearly worthless in the marketplace. This caused them to become undercapitalized and to fail.



Some of the subprime borrowers were speculators that were flipping houses, using Alt-A loans (option ARMs, interest-only, no doc, etc.) to acquire real estate with virtually none of their own money involved. This caused the housing market to become highly leveraged and over-priced.



Others were victims of predatory lending practices. A low-income widow who owned her home free and clear might be targeted for a refinance and cash out to pay unsecured debt. Once her interest rate adjusted, she would lose her home, after paying thousands in fees to the mortgage lender.



Still others were young families struggling to make ends meet and achieve the dream of home ownership. In a rapidly appreciating real estate market, waiting and saving were futile. By the time they saved enough, any house would be out of their price range. The only way to afford a house was often through creative financing terms.



Since the 1980s, the American work force achieved an unprecedented increase in productivity. But who realized the benefit of this increased productivity? Not the workers! For over 20 years, their salaries remained stagnant while energy, real estate, and health care costs more than tripled. No wonder they turned to credit.



All these influences converged to form the perfect storm. Once real estate values stopped increasing, the house of cards fell down.Is lack of people accepting personal responsibility at the core of the financial crisis?American's are gullible and don't pay enough attention. We are marketed the idea that we can have whatever we want now, not need and we can have it immediately without waiting...for a small fee of course. Most things on sale we buy cost much more once we pay interest. Credit cards are the true problem and the true Predatory Lender. The government is full aware of how the industry sets us up. Any card that sells out of Deleware or sells are their cards to a Deleware Corp is specifically doing so to avoid Usary Laws. Once they have avoided such an important law by playing the system, they specifically calculate every way to persuade usage and increase fees and interest, ie: Profit



Yes, most of us are irresponsible. We live beyond our means and spend more than we should. We also have a corrupt system.