Recession Villains: Who Will Be Blamed Next?

WASHINGTON, March 24, 2009— -- With the economy mired in a 15-month-long recession, government bailout programs marred by fraud, executives at ailing banks collecting million-dollar bonuses, and investors irate about money lost to Ponzi schemes, there is plenty of blame to go around. And not a week seems to go by without the public picking a new person to point the finger at.

"What happened is our sense of fairness and justice has been deeply offended and now we feel vengeful and vindictive," said Dan Ariely, author of "Predictably Irrational," a book that explores the causes of everyday behaviors.

Early this month it was Bernie Madoff, who schemed investors out of $65 billion. Two weeks ago it was Jim Cramer, the CNBC talk show host eviscerated by Comedy Central's Jon Stewart. Last week it was Edward Liddy, CEO of AIG, who dished out $165 million in bonuses to executives at the bailed-out insurance giant.

So, who's next in line?

Some Republicans have directed criticism at Treasury Secretary Tim Geithner, calling for him to resign for not stopping the AIG bonus payments.

On Capitol Hill, Sen. Chris Dodd, D-Conn., has come under fire for a change in the stimulus bill that scrapped a measure that would have prevented the AIG bonuses. Former Texas Sen. Phil Gramm, a champion of de-regulation when he was chairman of the Senate Banking Committee that Dodd now leads, was recently selected -- in a TIME magazine vote -- the person most blameworthy for the economic crisis.

While no one is comparing Geithner, Dodd, and Gramm to Madoff, Cramer and Liddy, analysts say Americans want to get revenge for the economic crisis.

"The question is who can we exhibit revenge against?" said Ariely, a professor of behavioral economics at Duke University. "How can you get revenge on a system? It's just not something we're used to. It's just not something we're designed to do. Institutions are relatively recent inventions in our history and we're not designed to feel revenge against institutions. Individuals, yes."

Madoff incited fury with his $65 billion Ponzi scheme. Before he appeared in a New York City courthouse to plead guilty earlier this month, the outrage of victims came to a boil.

"I'm thinking of it in terms of the 18th century trials in England where crowds of people would gather and throw stones," Manhattan resident Helen Chaitman said.

From Madoff to Cramer to Liddy

Applause echoed through the courthouse after the judge ordered Madoff to jail, once he entered 11 guilty pleas and read a six-page confession. He now faces 150 years behind bars.

But it didn't take long for public anger to turn to Jim Cramer, the CNBC host who spent 22 painful minutes getting an earful from Jon Stewart on "The Daily Show" March 12.

"I understand that you want to make finance entertaining, but it's not a [expletive deleted] game," railed Stewart, hammering the former hedge fund manager.

Even the White House approved of the nationally-televised beatdown, which led some to question whether Cramer's career has a future.

"I enjoyed it thoroughly," President Obama's press secretary Robert Gibbs said the following day.

No sooner had Americans stopped directing their anger at Cramer and Madoff than they quickly turned their attention to Liddy, furious over the awarding of $165 million in bonuses to executives at the struggling company that has received more bailout money than any other.

On March 15, Rep. Elijah Cummings, D-Md., a member of the Joint Economic Committee, called for the AIG chief to step down, accusing him of "reckless and irresponsible behavior." Cummings had also called for Liddy to resign weeks earlier.

At a Capitol Hill hearing last Wednesday, lawmakers got their chance to tee off on Liddy, turning the CEO into a virtual punching bag for his five hours of testimony.

"There's a tidal wave of rage throughout America right now and it's building up and it's expressing itself at this latest outrage, which is really just the tip of the iceberg," Rep. Gary Ackerman, D-N.Y., said at the hearing. "And that rage is because the taxpayer knows that they are the ultimate sucker on the list of who pays for all the greed that has been going on in the marketplace for years and years."

Liddy described to lawmakers the threatening letters his company had received in the wake of the bonus controversy.

"I am just really concerned about the safety of our people, so let me just read two things to you," he said, starting to read letters. "'All the executives and their families should be executed with piano wire around their necks. My greatest hope -- if the government can't do this properly, we the people will take it into our own hands and see that justice is done. I'm looking for all the CEOs' names, kids, where they live, et cetera.'"

Blame Game: Is It Dangerous?

Ariely said that the danger of putting so much blame on individuals rather than systemic causes for the financial crisis -- such as, for instance, conflicts of interest -- means that there may be less attention paid to fixing what went wrong.

"We might neglect the important things when we focus on the personally disturbing, but less important things," he said.

"From the economic perspective, we gave AIG so much money, who cares about a few millions here or there? You know, it's a drop in the bucket in terms of all the money we lost," Ariely said. "But the fact is that that particular money is associated with the individuals who we feel betrayed us and we want them to suffer. And because we want them to suffer so much, we get extremely agonized, we're extremely suffering, we're extremely unhappy when they're not always suffering, but they seem to be gaining."

If Obama does not handle this anger correctly, liberal columnist David Sirota told ABC News, then it could eventually be directed at his administration.

"I think the fact that he's portrayed, or his administration has said that one of their goals is to tamp down the anger instead of channel it into something more positive, I think that's a real problem for him," Sirota said. "I think it's a problem because if he doesn't get out in front of this populist anger, he will become a target of it."

As past targets of public discontent can attest, the anger of Americans packs a mean punch.

ABC News' Drew Millhon and Charles Herman contributed to this report.