READ BELOW ABOUT HUFFPOST'S DISHONOR ROLE:
Just like HuffPost's honor-roll of those who predicted and even warned against actions that have landed us in today's economic crisis, we have a dishonor roll chronicling those who helped create the situation.
Below is the beginning of our look at some of those figures--politicians, economists, pundits - whose recklessness and own greed have created the situation we're in today. Please check back as more names are added to our list and by all means let us know who else deserves to be on our dishonor role.
Alan Greenspan
The New York Times took a hard look at former Federal Reserve Chairman Alan Greenspan's legacy in Thursday's paper, leading with this statement of Greenspan's from 2004: "Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient."
Stronger regulation of derivatives would have done much to stem the current financial crisis, but Greenspan argued against such measures:
"What we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn't be taking it to those who are willing to and are capable of doing so," Mr. Greenspan told the Senate Banking Committee in 2003. "We think it would be a mistake" to more deeply regulate the contracts, he added.
---
Phil Gramm
Gramm, McCain's chief economic adviser, helped craft the Gramm-Leach-Bliley act, "a bank deregulation bill that swept away a Depression-era law known as Glass-Steagall" as the Times writes. The Times also notes of Gramm:
For more than two decades in Congress he argued that the forces of the market had to be freed from government interference. Just a year after the passage of Gramm- Leach-Bliley, he was largely responsible for another bill -- the Commodity Futures Modernization Act -- that clearly did contribute to the current crisis. That law unleashed the derivatives market and paved the way for banks to become more aggressive about investing in mortgages. As recently as this summer, he was still saying that the biggest problem facing the American economy was excessive regulation.
---
Chris Cox
Currently head of the Securities and Exchange Commission, Cox helped put greater deregulation into effect, and as of last March, was saying the following:
"We have a good deal of comfort about the capital cushions at these firms at the moment."
---
Henry Paulson
Paulson, currently the Secretary of the Treasury, is leading the government's efforts to rescue the economy, but he himself was a major proponent of rolling back what he called "excessive regulation" and reducing the power of financial regulatory agencies.
They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.
The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.
---
Joe Cassano
Cassano, the executive of AIG, the insurance giant which received an $38 billion bailout loan from the federal government, is identified by CNN as number 10 in their top 10 list of people behind the current financial crisis. AIG, under Cassano, gambled huge amounts of money on mortgages that ultimately went bad. AIG boasted that it had once pioneered some of the exotic investments that are now bringing Wall Street to its knees. Watch the CNN report below
---
Richard Fuld
Fuld, the former CEO of Lehman Brothers (the storied firm went bankrupt during the current crisis), is pegged by CNN as the 9th in their top 10 list of culprits to blame for the economic crisis. CNN reports that Fuld drove the company deep into the subprime market, and instead of scaling back the firm's investments when the market began to go south, Fuld doubled down and ultimately drove the company off the subprime cliff. Watch the video on Fuld below.
---
Martin Sullivan and Robert Willumstad
Martin and Willumstad were both CEOs of AIG during a time when documents show that the company knew of potentially serious problems in evaluating derivatives contracts:
Top officials at American International Group Inc. knew of potential problems in valuing derivative contracts long before these risky transactions caused the insurer's shareholders severe pain, according to documents released by congressional investigators.
The disclosures come as prospects dimmed this past week for AIG's efforts to quickly sell assets to repay its bulging debt to the government. The derivative-contract problems would have driven AIG into bankruptcy; in the past month, the government has made available to AIG nearly $123 billion in a rescue plan.