Selective Vilification: Is Wall Street The Only Villain?

Here is an interesting counter-argument on the AIG (AIG) bonuses furor that basically boils down to the following: “what the AIG executives are doing in terms of receiving bonuses, is no different from the irresponsible greed on the rest of Wall St. or on Main St for that matter. I.e. receiving a bonus check from AIG is not really different from the actions of the people on Main Street who abused HELOCs, over-spend on homes, lied on mortgage applications, etc.

While I don’t completely agree with the author in terms of defending the AIG bonuses, I can’t really argue with the fact that as a society we are very, very selective in terms of assigning blame for this crisis.

Our fiscally irresponsible neighbor facing foreclosure is a victim while a Wall St. executive is a villain, we rail against executives for receiving bonuses while conveniently ignoring the benefits we enjoyed from inflated housing prices. Better yet we rail against the executives for “causing” the housing crash, while simultaneously clamoring for our politicians to step the decline in housing prices as if they were legitimate in the first place. Conveniently ignoring the fact that housing prices were inflated via bad lending and borrowing practices, and were never valid/real in the first place.

At some point we’re going to have to start acknowledging the Villains we’d rather ignore, because it’s the only way we’re going to be able to fix all the various causes of the current economic crisis. We can’t have it both ways where we blame the executives for providing us with the things we used to benefit from, yet claim to be victims because those things are no longer available.

Both irresponsible consumers and irresponsible executives are the villains of the current crisis and it’s time for both parties to take accountability for their actions, as opposed to the current scenario where we deride the latter and ask the government to rescue the former.

Disclosure: at the time of publishing the author didn’t own a position in any of the companies mentioned in this article; the ideas expressed are solely the opinions of the author and shouldn’t be viewed as financial or investment advice.

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