Patient Zero: Finding out who caused the Global Financial Crisis

If there's one thing wrong with the Global Financial Crisis it is the lack of a good bad guy; someone everyone can focus their blame on. A patsy if you will. If the GFC were a disease, we would be searching for patient zero - the first carrier; and to be honest, the media really have dropped the ball here.

Some "lefty" commentators have sought to blame the CEOs of investment banks, such as Merrill Lynch's John Thain (why wouldn't he deserve a $10m bonus?), or even the US Government (especially that superlative President George Bush). But really do you understand what went wrong? Mortgage back securities? Derivatives? Currency exchange swaps? Sounds like journalistic gobbledygook to me, and let's be honest when it come to finding a good easy-to-blame patsy, invoking economic theory ain't gonna do it. The main problem is such arguments focus on "what" caused the GFC. "What!?" Who cares about "What"? You think you can stick a "what" on a wanted poster? Nope, that dog won't hunt; we need a "who".

So let's work it through CSI style.

Australians at the moment are losing jobs because,
Chinese companies don't want to buy so much of our iron ore because,
American stores aren't buying as much of the stuff that gets made in China out of our iron ore because,
Americans have not been buying as much of the stuff from the American stores that gets made in China out of our iron ore because,
Americans have been losing their jobs because,
Americans have not been buying as much of the stuff from the American stores that gets made in China out of our iron ore because,
Americans' loans have been too big to allow them to buy the stuff from the American stores that gets made in China out of our iron ore because,
American banks have been giving out bad loans to Americans who work in stores that sell stuff to Americans that gets made in China out of our iron ore because,
The American Government looked the other way while the banks gave out bad loans to Americans who work in the stores selling the stuff that is made in China out of our iron ore.

So there you go. Now as I said most "lefty", "tree-hugger", "kumbaya-round-the-campfire" type of commentators have been looking at the US Government - say former President Bush and asked why he looked the other way while the banks gave out these bad loans. Or other pinko-probably-had-pictures-of-Che-Guevara-on-their-university-dorm-room-wall types blame the American banks for giving out the bad loans and bundling them up as "mortgage securities" and calling it risk management.

But c'mon it doesn't take an Andrew Bolt or Janet Albrechtsen to see that there was nothing wrong with the loans so long as the mortgage holder tightened his or her belt, kept his or her job, and went without those "luxury" items the lower classes always seem to be buying. You know what I'm talking about. Stuff like clothes and food. Yep. Greed, plain and simple. Just another case of them trying to get above their station. You know it, I know it, heck, John Thain sure as hell knows it.

And remember as well, up until the arse fell out of the world last year, things weren't too bad. OK unemployment was rising in America, but let's be honest only those not up to scratch would have been getting the sack. So why shouldn't banks give out the loans?

And it's not like the debt crisis just happened. Things like this, don't just happen. World War Two didn't just "happen". There had to be one loan that tipped the scales. One final mortgage that just didn't get repaid that caused say Lehmann Brothers (that great, bold bastion of all that is good about capitalism) to go bankrupt.

All we have to do is find the person who stopped repaying the loan that was this final straw.

Now the "lefties" (those Rudd-loving, Julia Gillard is the greatest types) would want to find the boss who sacked this guy who had the loan that required about 60% of his income to repay. Tut, tut, tut I say. Times were good last year (well not 'good', but let's not quibble over statistics like unemplyoment rates or anything); so long as you were prepared to do an honest day's work for a dishonest day's pay you would have nothing to worry about.

Now obviously this guy was American. And I'm going to say he lived in Scranton, Pennsylvania, because during the VP Debates Joe Biden went on and on about how life was tough growing up in Scranton, Pennsylvania, so I'm thinking given Biden is a left-wing Democrat, no doubt the town is full of like minded dead-beats who think they deserve to own a home even though they don't work in an office, or didn't go to university.

I'm betting he has three kids, a wife who works part time at the local A&P (I have no idea if Scranton has an A&P , but they get mentioned a lot in American films set in the suburbs, so I'm guessing she works at one). I'm also betting they live on West 64 Street (I don't know if Scranton has a West 64 Street, but American movies are always talking about streets with numbers and points of the compass so I think it's a good chance). No doubt he (let's call him Bob) worked at the local mill (I don't know if Scranton has a mill, or what actually gets done at a mill, but Bob would've worked there).

The problem though I'm betting was that Bob didn't work very well at the mill. No doubt he was late to work once or twice (well maybe not, but hey, there's no need to bring in the truth at this point). Heck he probably had to go do some service in Iraq because like a fool he joined the national guard because he felt kinda patriotic.

Whatever Bob, talk to the hand, cos I ain't listening. Times are tough (for slackers anyway), and so you're gone. Hit the bricks, here's your severance pay - try not to blow it all on 'luxuries' (c'mon you know what I'm talking about).

And so there you have it; Bob Jackson (yep Bob Jackson sounds like a good blue collar doesn't want to pay his bills kinda name) goes along to his local bank, says he can't pay his loan which means Lehmann Brothers (that great big, bold bastion of all that is good about capitalism) which has bought a percentage of the loan as part of a high-interest (supposedly low-risk) derivative goes under, and as sure as the knee bone is connected to the thigh bone, Australians start losing their jobs.

So there you have it world: Bob Jackson of 28 West 64 Street, Scranton, Pennsylvania is responsible for the whole Global Financial Crisis.

Whew! Glad we got that sorted out. Problem solved. Now, let me just get back to working on that Middle-East thing...