Playing the Financial Crisis Blame Game

LONDON, Oct. 9, 2008 -- People around the world are concerned and angry about the global financial crisis, with blame falling on the United States and "greedy" bankers on both sides of the Atlantic.

With the crisis seeming to deepen as governments of developed nations pour trillions of dollars into solutions, the search for villains appears to be well under way.

Today in Great Britain, the rage was directed at what the tabloid newspapers called "fat cat" bosses from the British bank Barclays. The executives embarked on a luxurious "all expenses paid" business trip to Italy, just a day after the U.K. government put up $865 billion to bail out the country's banking system.

Comments posted on the Web site of the U.K.'s Daily Mail show the anger of ordinary people. "We need to stop their greed before they have squandered all our money on pay, bonus and flights of fancy like this," wrote Eliza from London. Penny from Bristol posted: "I think this is really disgraceful and very insensitive."

British Prime Minister Gordon Brown was quick to point the finger last week. "This problem started in America. They have got to sort it out," he said then.

However, Brown, who was the country's finance minister before becoming prime minister, has since stepped back from those comments after coming under attack from the press and public for a lack of regulation of the country's financial markets and for not saving enough during an economic boom.

Today, Brown admitted the United Kingdom shared responsibility for the financial crisis. On the British daytime TV show GMTV he said: "These guys have taken irresponsible risks; that is completely unacceptable. The problem is they didn't know what they were buying from America."

Other European leaders have tempered their remarks about the U.S. too, since the crisis has spread to nearly all world markets in the past two weeks.

On Sept. 25, German finance minister Peer Steinbrück echoed earlier comments made by the country's chancellor, Angela Merkel, saying: "The United States is solely to be blamed for the financial crisis. They are the cause for the crisis, and it is not Europe and it is not the Federal Republic of Germany."

Germany's weekly news magazine Der Spiegel featured a cover showing the Statue of Liberty with its torch extinguished. The Die Zeit newspaper printed a graphic of a Bald Eagle falling to Earth while holding a European Union flag.

But as Germany then faced its own financial woes, the critical voices dimmed.

A few few days later, Germany's second-biggest commercial property lender, Hypo Real Estate, was threatened with collapse. The government was forced to bail out the company for around $68 billion.

Germany's opposition Green party, Reinhard Buetikofer admitted that: "For a while, a large segment of the public considered all this as innocent German banks caught in an American mess. ... Only recently has the public started to understand how much we are involved, and how much of this has been our doing, too."

According to ABC News' Christel Kucharz in Germany, the country's politicians and media have not heavily criticized the United States in recent days.

Who's to Blame?

So why is there less finger pointing at the United States, where the subprime mortgage mess originated?

"The eyes have been on a different ball," Ruth Lea, director of the U.K. Center for Policy Studies, told ABCNews.com.

Lea explained that while some countries still blame the United States, they have now been distracted by their own internal economic problems.

Lea told ABCNews.com that "at the end of the day, most people accept that the American subprime market is to blame."

She argues that although foreign banks have taken risks, the blame sits squarely with America. The crisis took root in subprime mortgages enabled by lax government regulations as well as by low interest rates set by Alan Greenspan at the Federal Reserve.

Mark Duckenfield of the London School of Economics said, however, that other countries are as much to blame.

"Deregulation and a lack of financial oversight are not exclusive to the U.S.," he told ABC News. "A lot of European countries embraced the free market and deregulation."

Banks were "loaning without the full appreciation of the risks" while banks and customers were "getting into debts they weren't able to handle." He added that banks in the United Kingdom, Germany and other countries have lost out not only on the U.S. subprimes but on speculation on the housing markets in their own countries.

Martin Weale, director of Britain's National Institute of Economic and Social Research, said that although many of the problems began in the United States, those working in the financial sector around the world were behaving irresponsibly. "In Europe, banks were buying what turned out to be subprime mortgages without bothering to check exactly what they were," he told ABCNews.com.

"It's useful for politicians to make the problem someone else's fault," said Justin Urquhart Stewart of Seven Investment Management. He told ABCNews.com that although the "subprime mortgage problem in the United States was the trigger, the issue has been there for some time, with the complacency of bankers."

He believes that consumers are just as much to blame. "Consumers were quite happy to play along with the unsustainable idea of 'free money.'"

The French View

Among ordinary people in France, there is a sense that this is a global problem and the United States is not solely to blame, according to ABC News' Christophe Schpoliansky in Paris. "I haven't seen strong anti-Americanism from the global financial crisis," he said. "I don't think people are out on the streets, screaming their rage against the U.S."

France's President Nicholas Sarkozy called a meeting of European nations last week to address the financial crisis. "After this crisis we will have built the pillars of a new financial world," he said, a comment viewed by some observers as a swipe at the U.S. financial institutions.

However, Sarkozy appears to hold his own country's bankers to account too. According to The Washington Post, he asked his advisers after he was forced to allow a $92.2 billion bailout for the European bank Dexia, "What were they doing screwing around in the United States?"

Russia is suffering from the world financial crisis with its stock market in turmoil, but unlike in Europe, criticism of the United States continues. Today President Dmitry Medvedev said: "Confidence in the United States as the leader of the free world and the free market, the trust in Wall Street as the center of this confidence, has been undermined -- for good, I think."

Last week, Prime Minister Vladimir Putin described the credit crisis as "an infection" that has spread from the United States to Russia.

American accountant Irwin Stelzer, writing in the U.K.'s Times, argued that Putin blames the United States rather than Russia's own "confiscation of foreign investment and invasion of Georgia."

Margot Light, professor emeritus of the London School of Economics, an expert in international relations, told ABCNews.com that she believes Russia's financial problems are clearly "linked to the global crisis since the subprime market problem in the United States. "

Japan is suffering from the financial crisis with a weaker dollar damaging its exports. Japan's Nikkei stock exchange saw its third-biggest single-day drop on record yesterday. However, according to ABC News' Noriko Namiki in Japan, there is more concern than anger at the United States.

"I do not think there is a sense of anger or anti-Americanism as far as Japan is concerned. Japan wants the U.S. to take clear actions, but I have not found a lot of finger pointing."

China lowered its interest rates after the financial crunch, but ABC News' Beth Loyd said there is no widespread ire directed at the United States. "Chinese people are used to rough times, and they don't blame Americans, certainly not for what is going on in their domestic markets."

If the roots of the global financial crisis seem unclear to politicians and ordinary people, it might be because not even financial experts fully understand what is going on, said Duckenfield of the London School of Economics.

"Part of the problem is that we don't understand many of the connections between the financial markets. It would be a lot easier to fix if we did," he told ABCNews.com.