Who's mostly to blame for the financial industry meltdown?

While individuals DO have responsibility for their financial life, lenders who threw caution to the wind and forgot about due diligence, are the spark that lit the wildfire of rampant, unmanageable consumer debt.

Note the number of credit card offers that pour in our mailboxes marked Pre-approved for $80,000, or have a fake check that can actually be used....and which hooks unwary consumers into a world of painful "interest only" loans.

What happened to being approved within strict fiscally responsible guidelines, as little as 20 years ago, when debt-to-loan ratio and whether you were really employed meant something?

If your lender said you could afford it, you could if you managed your income and outgo properly. If the lender said you couldn't afford the loan unless you brought your debt level to a specific amount or less...they meant that, too.

I, for one, am surprised that good financial practices were laid aside by so many, and by such large companies. I don't know how so many could have succumbed...but I suppose easy money was the temptation...and it was like a domino effect: if so & so company is doing it, why shouldn't we reap the quick harvest like they are? (reminds me of lemmings).

However, I DO NOT think the government should be our babysitter. We are adults and should act like it, or live with the results if we don't. I think the problem is that the government, in some cases, has not allowed the pain of failure. After all, negative results are what ultimately help people and businesses grow and mature. It can even spawn genius ideas.

Blaming the government for this current crisis appears to be a moral cop-out, in my opinion, and is dangerous if people believe it's true. I, for one, would rather make decisions and learn from my mistakes than have the government or some faceless entity take away my right to learn and grow.
ok, off the soapbox now....

I can and do blame the government for lack of oversight in the investment banks, energy companies, etc. It is just another example of the good old boys network and the GOP Grand Oil Party. Do away with regulations so they have free capital makets that they said would take care of themselves. Well it just goes to show that they behave like little children with the cookie jar.
First we had blackouts in California and it was not for lack of energy! Then we had soaring gas prices built on speculation. Then the credit crises which has now led to the largest bailout in the history of the United States. McCain says our economy is fundamentally strong the day before the collapse. Then he corrected himself and said he meant the American Workers. Well John, the American workers are losing their jobs to other countries and you need to retire! Go have a Bud!

It's too simplistic to assign 100% blame to just one group. A more accurate (and interesting) survey method, IMHO, would be to allow users to assign a percentage blame. Using that format, I would have broken out government into Congress, White House, and GSEs (i.e. Fannie & Freddie).

We can't blame lack of government's rules and controls as the major cause of this financial crisis; however, central banks have several responsibilities:
- lack of control on rise and rating of subprime mortgages
- little action on fall of interbank loans (and no proposal to avoid it)
- only for ECB: too little effort to reduce interest rate
Now, it's time to make inancial markets to work, avoiding rushes to banks and credit crunch for enterprise: 1929 must have tought something.

My view is that all parties are to blame however at the end of the day if things look too good to be true they usually are. So it is hard for me to believe that individuals were completely clueless and duped into borrowing sums of money that they could never payback. Obviously this would never have happened had the other conditions not prevailed ie easy money and reckless lenders but at the end of the day the individual has to be resonsible for their own fiscal well being.

Government should have more regulatory control. How many times do similar situations arise before they realise the extent of the iimpact from the initial small number of large failures.
Financial institutions bear equal responsibility through not applying sound lending criteria.
Does anyone think through or model the implications of the creative products. before they are introduced. Should these models be subject to regulatory audit.

You should have provided one more option i.e. all the above to be blamed equally. None of these three should be spared whether it is negligence on the part of government or greed of the financial institution or foolishness of the borrower. I think all the three parties have failed to do their job. How can a borrower think of buying something which he / she cannot afford, how can any financial institution lend money to someone who cannot repay, how can government remain blind to all this till couple of weeks ago? The worst thing is that we talked and bailed out the culprits and continue to talk about bailout for more culprits. Where does it end? Ultimately, only the genuine tax payers are punished.

I think it is ultimately everyone's own responsibility to watch his/her spending habits (in the case of the borrowers) and also the financial services companies responsibility to ensure their loans will be repaid if they want to remain in business. I don't think the goverment's role is to "protect" anyone who is purposefully taking on more than they can afford or that is reasonable. Educational programs to ensure people have the capacity to make wiser decisions is what goverment can or should do.
It is ultimately the freedom for people to make decisions (even the not very wise ones) that has made this the great country it is. And all parties should carry with the consequences of bad decisions, just as they reap the benefits of the good ones. If the government keep "saving" the unwise, I think is giving incentives to the wrong people, reinforcing their negative behavior.