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Fallout: The Financial Crisis

Letters from our listeners

Marketplace Staff Oct 7, 2008
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Fallout: The Financial Crisis

Letters from our listeners

Marketplace Staff Oct 7, 2008
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TEXT OF STORY

Kai Ryssdal: While it’s often said that revenge is a dish best served cold, my interview last week with Duke economist Dan Ariely got a whole lot of you hot under the collar. We talked about how maybe, just maybe, people opposed to the bill were upset because there was no way to punish those responsible for the crisis. Of the many, many e-mails we got, we’ll pick just two to summarize how you felt.

First, Louise Kasl’s from Clarkston, Michigan.

Louise Kasl: Its not about revenge for me, though I want a lot of people punished. It’s about trust. I don’t trust this is the disaster they say, that these bills will fix the real problems-whatever they are, that anybody will be forced to do business honestly or that it will help me or any of Main Street.

Dan McGee from Reno, Nevada, says revenge is besides the point.

Dan McGee: I think what is happening with regards to the rage the voters feel comes from the appearance that billions of our money is going to be thrown down a rat hole and executives, who should have known better, will be able to walk with millions.

Professor Michael Belzer teaches industrial relations at Wayne State University. He wrote to say Ariely was right on for two reasons.

Michael Belzer: It satisfies our behaviorally rational need to punish transgressors, and it builds punishment designed to discourage them from doing more of the same. Up to now, with a deregulated environment, it has not made economic sense for them to act prudently, and their imprudence led us to the abyss.

We also had Chris Mayer on the program with us last week. He’s a professor of real estate and economics at Columbia. In a commentary, he said the federal government ought to do something to lower mortgage rates, that letting home prices to keep on falling isn’t going to help anybody.

Andrew Levitt wrote from Philadelphia, Pennsylvania, to say that he sees the troubled market differently.

Andrew Levitt: Maybe it doesn’t help people who already own houses, but for the first-time buyers like myself the housing market is still way overpriced. Let’s let those prices come back down, so that people in my generation can buy a normal home in a nice city.

Finally, whether you want revenge or not, It’s clear that a lot of people blame Wall Street for the financial mess, or they blame the government for not regulating big banks. Sal Incorvaia from New York City says there is somebody else to blame.

Sal Incorvaia: Who’s to blame? We are, because we didn’t stay informed enough and pro-active enough and allowed the Fed, the government, Fannie, Freddie, the banks, the SEC and finally Wall Street to prey on us all.

And with that an end to the blame game, unless you want to blame us for something Marketplace.org — click on the link that says Contact.

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