It is Our Own Fault

MSN Money has an article today called 7 Tips: Surviving a Financial Panic. Besides the usual “don’t mess with your 401(k)” and “build an emergency fund” advice, there was a section on “Keeping historical perspective”. I require perspective. Can someone please draw me a “how bad is it” chart comparing now with 2002 and the Great Depression? Anyway, I liked this bit:

“Want to know whom to blame? Well, it wasn't just the greed-is-good Wall Street moguls and deregulation-happy politicians who led us to the precipice, according to Guillen, the Wharton professor. He thinks we all have lived beyond our means. We have spent more than we've saved. We've wanted to own homes at any cost. Investors haven't been satisfied with fair returns on their money. They've wanted to make killings.

"Wall Street is to blame, but don't forget that everyone was very happy to take part in the big party," Guillen explains. "We are all responsible for what happened."

Let's keep all this in perspective. To be sure, the Great Depression was far worse than today's situation. Then, unemployment ranged as high as 40%, compared with 6% now. Interest rates are still low today. The economy is experiencing weak growth but not the full-blown contraction witnessed during the Depression.”

Here’s how I feel: my 401(k) has taken a beating, but I still have a good job and my mortgage is manageable and I do not otherwise carry debt. We lived through the Great Chicago Floods of 2007 and 2008. I am counting my blessings.