Did Greedy Executives Cause the Mortgage Crisis?

From The New York Times article, The Fannie and Freddie Fallout

IT’S dispiriting indeed to watch the United States financial system, supposedly the envy of the world, being taken to its knees. But that’s the show we’re watching, brought to you by somnambulant regulators, greedy bank executives and incompetent corporate directors.
This wasn’t the way the “ownership society” was supposed to work.

Is this true? They're saying our system is based on having responsible bank executives and corporate directors, and their lapse in judgment led to the mortgage problems. If that’s true, we should know that sooner or later a system based on the responsibility of human beings will eventually have problems.

While a system with a small group of individuals charged with doing the right thing would be flawed, our economic system does not even have such a protection. The owners are so divorced from decision making that they end up accidentally encouraging risky and unethical behavior. (Click on the chart to enlarge it.)


It’s a circular org chart with no one in charge. We haven’t appointed one group along the chain to be the guardians of long term stability or even guardians of what’s morally right.

I am not at all against corporate ownership of the means of production. On the contrary, it provides a means for productive ideas to be funded. Although our system of ownership needs improvement, I do not have a plan to improve it. All I’m saying is throwing all the blame on “greedy executives” is empty calories.