Who Caused The Current Financial Crisis?

Say you're in the business of making loans. Say you offer me a $500,000 mortgage with a low adjustable interest rate and do not require a down payment. Even better, say you offer me an option ARM note with an adjustable payment that can be low enough to not only not pay back the principal which I borrowed but not even cover the month's interest with a net effect that after paying for a couple of years I'll owe more money than I originally borrowed! (negative amortization) And for the clincher, you're not even going to check my income or my credit history!

Why would you, the loan originator want to do these things? For starters, it's not your money, you'll make your money upfront by large fees & commissions then you'll take my loan along with a number of others and, have one of your 'associates' at one of the rating companies declare it to be 'AAA' rated and sell it to "someone else" as an 'investment security' (at another fat commission, of course).

Uh, oh, bad news, I can't make the payments and the note goes into default & foreclosure, looks like it's time to blame somebody. Is this debacle my fault for being greedy in wanting, say, a nice house and lazy or confused by the sheer complexity of the loan you made me? Or is it your fault for being greedy (remember all those fat fees & commissions?) and irresponsible as you didn't require a down payment or a credit/income verification? Should I get a bailout? Maybe I'm too small to help? Or should the note-holder get a bailout as they're likely too big to fail? These are taxpayer funds that will pay for this bailout, should we then 'privatize the profits' yet 'socialize the risk'?

Numerian at the Agonist has an excellent albeit lengthy post that gives a clear, concise & detailed explanation at the slow-motion collapse of the enormous Ponzi scheme that is our economy these days. If this is something that you find interesting (and no doubt confusing as well) it would be well worth your time to read the post, the comments and the linked articles.

"By the time the scheme collapsed, the averaged household had $115,000 in total debt, was using as much as 40% of disposable income each year to service this debt (and all the fees involved), and had only $392 each year to put away as savings. You can see now how ridiculous it is to call the consumer equally at fault in such a system."

At the risk of seeming sanctimonious, other than needing another job I don't have a lot at risk these days, everything I own is paid for and we have savings, not debt. I had a beloved grandmother who survived & prospered through the depression of the 1930s and what I learned about the importance of savings and the avoidance of debt, I learned from her.