To the editor:

The financial crisis of 2008 was the worst economic downturn in the U.S. since the Great Depression of 1929. Economists have determined various economic causes for the 2008 failure. But the underlying cause was a behavior failure — excess greed and corruption.

The 2008 crisis was a complete breakdown by all participants. The banks and real estate agencies were providing loans to buyers without properly vetting people’s finances, allowing lots of buyers to buy homes the sellers knew they could not afford. Most buyers also knew that they home they were buying exceeded their financial condition.

The Wall Street financial institutions also contributed to the problem. Individual mortgages no longer remained at the origin of the loan. Wall Street bundled these questionable mortgages with a few AAA-rated mortgages and sold them as a unit. The rating agencies joined the charade by giving a AAA rating to these bundled products. As expected, in time, many of these questionable home buyers began to default on their loans.

Wall Street’s questionable investments also began to create huge losses. Together, these failures almost collapsed the entire financial system of the United States. The following decade has produced a slow and painful economic recovery from this 2008 crisis.

A decade of slow economic growth has stagnated the standard of living in many countries. Globally, the middle class has been damaged the most. Many of their citizens feel that democracy and capitalism are failing them. Failure of democratic governments to benefit the majority of their citizens creates inequality, anger, distrust and less hope for their people. Democracies around the world are currently under attack by authoritarian governments offering a better solution.

Larry Shade, Columbus

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