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Who caused the global financial meltdown?


CofCC.org News Team

Time magazine has a really great interactive feature on the people who caused the global meltdown.

Click Here. You will see a number of individual entries briefly explaining the person’s role in the financial crises.

From Time Magazine Online

Raines – Photo Top Right

Raines was at the helm of Fannie Mae, the bastard offspring of politics and finance, when things really went off course. A former Clinton Administration Budget Director, Raines took over as CEO of Fannie in 1999. He left in 2004 with the company embroiled in an accounting scandal just as it was making big investments in the subprime mortgage securities that would later sour. Last year Fannie and rival Freddie Mac became wards of the state.

Clinton – Photo Top Left

He oversaw an era of great ­prosperity — and deregulation. ­Clinton ushered out the Glass-Steagall Act and signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. He also ­loosened housing rules, putting added pressure on banks to lend in low-income neighborhoods. None of it was an endorsement of permissive lending and risk-taking. But if you believe deregulation is to blame for our troubles, then Clinton earned a share too.

Jiabo – Bottom Left

If cheap credit was the crack cocaine of this crisis — and it was — then China was one of our primary dealers. Wen leads a China that is now the U.S.’s largest creditor, holding some $1.7 trillion in dollar-denominated debt. Its massive dollar holdings can be linked to determined efforts to control the value of the renminbi vs. the buck; China didn’t want its currency to rise too rapidly against the dollar, in part because a cheap currency kept its export sector humming. And humming it was until U.S. demand cratered last fall.

Weill- Bottom Right

Who decided banks had to be all things to all customers? Weill did. Starting with a low-end lender in Baltimore, he cobbled together the first great financial supermarket, Citigroup. Along the way, Weill’s serial acquisitions, (Travelers, Smith Barney, etc.) and persistent lobbying shattered Glass-Steagall, the law that limited banks’ ambitions. Rivals followed Citi. The swollen banks are one of the nation’s major economic problems. Solution? Back to banking. Citigroup is selling Smith Barney and other noncore assets.