The Great Crash Of 2063, Ctd.

By Patrick Appel

Ross counters Henry Blodget:

[Blodget] runs through a typical housing bubble scenario - somebody buys a house late in the game and loses his shirt - and argues that almost everybody involved, from the homebuyer to the real-estate agent to the mortgage broker to the people on Wall Street and Washington who enabled the whole thing were making the same kind of mistakes, and indeed, were acting "just the way you would expect them to act under the circumstances." Now in a sense, this is convincing. But at a same time, our hypothetical homebuyer had very different responsibilities than a hypothetical Wall Street banker. His decision to buy at the height of the bubble put him at risk to lose, say, tens of thousands of dollars and perhaps the roof over his head. Those are high stakes, obviously, but they're high stakes for him and for his family. Whereas the risky decisions being made the people running, say, Citibank had serious consequences for millions of people, in America and around the world. And this distinction ought to matter, both to how people should be expected to behave, and how they should be judged.

Yglesias wieghs in here.