Repeating Financial Mistake

Right now, the United States could be seen as a thriving country. The country seems to be very prolific right now, to the point where people from other countries might not know about the financial crisis. The financial crisis, which was mostly due to rise of housing rates and the irresponsible lending and borrowing of mortgages, fell upon America in the fall of year 2008. This means that only seven years ago, America made a mistake, a mistake that still partly remains unsolved.

There is a controversy that lists who and who are possible groups of people who were to blame for this mistake: “the consumers of home mortgages”, “the lenders who initiated the bad loans”, or “the government whose regulators failed to protect the consumers”. In his essay “Why Did the Bankers Behave So Badly,” Sibert states that the people who are most responsible for this crisis are the bankers/employees of financial firms. He asserts that their behaviors are due to humans being “prone to cognitive errors involving biases towards their own prior beliefs.” But if these two statements are supposedly true, then the bankers should not be the ones to be mostly blamed for. The government and the consumers are also human beings who are filled with “greed” and “bad judgement.” They too are biased towards their own goals and thoughts so they also should be a big part of the problem. The government’s choice of deregulation of the economy and the consumers’ irresponsible borrowing of mortgages are also big contributions to the financial crisis.

So how do we solve this problem? It sounds very cheesy to say this but the fastest way to solve this problem is to work on this problem together as a whole. The government needs to know what’s best for the bankers, the bankers need to know what’s best for the economy, and the consumers need to know what’s best for themselves so that we do not repeat the same mistake as we did back in 2008 or in the Great Depression era. We made a similar mistake that was made in the Great Depression era, and there is no guarantee that it won’t happen again. To prevent such a crisis from happening again, we all need to reflect upon our flaws and actually act upon and eliminate all of them.