Who's responsible for the economic crisis?

Chart from New York Times -- Click on image to enlarge

Who's fault is it? Well, there's Wall Street, particularly banks and other financial institutions. Then there's Washington's failure to regulate adequately under both the Bush and Clinton administrations, not to mention Congress.

But it's also your fault. Yes, you. As the graph above demonstrates clearly, Americans have steadily saved less -- and consumed more -- year by year until the savings rate has approached zero in the 2000s. Since the graph represents aggregate savings, and some people have been saving something, there are a lot of folks who have bought houses they could not afford and consumed their way into an impossible level of debt. Alongside that, of course, many businesses have done the same, and banks and other lenders have passed out money with little regard for the risk.

The credit bubble has burst, finally, as inevitably it would. With that, the savings rate has begin to go up slightly, as you can see on the right hand side of the graph.

Any thoughts? Post a comment.