Financial crises caused by "stupidity and greed": Geithner

[Eugene]

Source: Reuters

Financial crises caused by "stupidity and greed": Geithner

PORTLAND, Oregon | Wed Apr 25, 2012 8:52pm EDT

(Reuters) - Treasury Secretary Timothy Geithner sought on Wednesday to reassure Americans that the Obama administration was doing what it could to rout out the bad actors from the worst financial crisis since the Great Depression.

"The wheels of justice are turning now," Geithner said at an event in Portland after touring a factory there. "They are not turning as fast as people would like, but we have the best system in the world for making sure we can enforce the laws of the land," he said.

Geithner suggested that holding people accountable for the wreckage caused by the recent housing collapse and the ensuing financial meltdown was not that simple since most crises were not caused by criminal activity.

"Most financial crises are caused by a mix of stupidity and greed and recklessness and risk-taking and hope," said Geithner, who helped tackle the crisis for the Bush administration when he was the head of the New York Federal Reserve and has been urging Europe to act more aggressively to contain its debt problems.

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Read more: http://www.reuters.com/article/2012/04/26/us-usa-economy-geithner-idUSBRE83P01P20120426

[Enrique]

1. then I guess there's no way to keep it from happening again

there will always be stupid and greedy people.

[lumberjack_jeff]

2. It's not a people problem, it's a system problem.

Greed is the problem, and you're going to weed out the few greedy bad actors? News flash, there's plenty more greedy bad actors where those came from.

Fix the fucking system, Tim.

[Bonhomme Richard]

3. OK. Now how about some laws to eliminate the stupidity and greed? n/t

[JDPriestly]

4. And fraud, Secretary Geithner, and fraud.

And fraud is illegal, Secretary Geithner.

It takes a lot of work, going through miles of documents to the smoking guns, but the incriminating evidence is there. Or at least it was there. Fact is that our government has already delayed investigating so long that most of the proof has been lost. And human memories have faded.

This is a matter of one case at a time of fraud by appraisers, investors, home buyers, mortgage sales personnel, developers, bankers, everyone in the business. It was an enormous web of lies, some very small, some hard to differentiate from mistakes, that added up to the big lie and a mountain of debt, pain and suffering.

So the real reason that this is not being prosecuted is that the fraud was so widespread and takes so much to prove that the powers that be have decided not to bother.

That is understandable, but they should at least have had a public investigation that was more thorough and more honest than the sham investigations we have seen.

[kentuck]

5. I would agree with the "greed" part.

I'm not so sure about the "stupidity". I think they were going to get theirs and let the chips fall where they may. It was more criminal than stupid, in my opinion. Also, I think it was a conspiracy by many.

[redqueen]

8. Spot on. nt

[coalition_unwilling]

6. Physician, heal thyself! (Geithner was head of the

NY Fed when the shit hit the fan - he should have reined in Citibank and other New York TBTF banks.)

You can read all about it in Joseph Stiglitz' "Freefall" (which I recommend as a general and balanced treatment of the panic and collapse).

[ananda]

10. Yeah, this is pretty rich..

.. coming from Geithner, who has always been part of the problem.

[GeorgeGist]

7. File under ...

No Shit.

[meow2u3]

9. Along with deregulation which enables such stupidity and greed

...that gives a de facto license for banksters to steal with impunity, not to mention the marked tendency for industry to capture regulatory agencies.

Another thing Timmy said:

"You can't legislate away stupidity and risk-taking and greed and recklessness. What you can do is make sure when it happens it does not cause too much damage and to do that you have to make sure you have good rules against fraud and abuse, better protections and you force banks to hold more capital against their risk," he said.

You can't legislate away stupidity...and greed...my ass!

[Hell Hath No Fury]

11. Uh, you forgot one Timmy --

FRAUD. Fucking FRAUD. Timmy once again trying to cover for his corrupt brethren.

[PoliticAverse]

12. A guy who had no clue there was a housing bubble certainly knows about the stupid part. n/t

[JHB]

13. Does he include himself in "stupidity"?

He was an advocate for the deregulation that enabled the greed to cause the crisis.