Mea culpa ...

 

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Washington looks poised for a new season of blaming the other guy, in this case to find the cause of the financial meltdown.

Four of the nation's top banking executives are scheduled to appear before a congressional panel Wednesday to open an investigation into the financial debacle that lead to a two-year recession and the loss of more than 7.7 million jobs. But the panel can expect very little in the bankers' briefcases that resembles an apology, The New York Times reported.

That requires objectivity -- hard to come by -- and a different personality than the A type bankers, who are generally cocky, aggressive types, various academics said.

"You don't get to the top of a large and highly competitive organization by debasement and humility," said Robert Bruner, dean of the University of Virginia's Darden School of Business.

Similarly, Sydney Finkelstein at the Dartmouth University Tuck School of Business said a long look at U.S. corporations found apologies were few and far between.

"Out of 100 or so companies we looked at, only one acknowledged managerial culpability," he said.

Neither is culpability U.S. Federal Reserve Chairman Ben Bernanke's first instinct, The Wall Street Journal reported.

In a monthly survey of business economists, the Journal said 42 indicated low bank-to-bank lending rates set by the Fed contributed to the housing bubble, compared to 12 who thought otherwise. Among academic economists, half blamed low interest rates while half did not.

Among the published comments, Columbia Professor Jon Steinsson said, "Excessively easy monetary policy by the Fed played at most a minor role in causing the housing bubble."

Steinsson said it was "not clear" the Fed, which kept interest rates at 1 percent through 2003, could influence real interest rates "for a very sustained period of time."

Williams College Professor Kenneth Kuttner said, "The 'bubble' didn't really get going until '05-06, by which time the Fed had raised rates to more or less normal levels."

Others pointed to more complicated scenarios.

"The more fundamental way in which the Fed contributed to the bubble was via the 'Greenspan put,' namely, the assurances the Fed gave markets that, whatever might happen, the Fed had both the ability and the willingness to clean the mess up ... without too much pain," Harvard Professor Jeffry Miron said.

But Bernanke's stand does not include low interest rates as part of the problem. In his words, "Regulatory and supervisory policies, rather than monetary policies, would have been more effective means of addressing the run-up in house prices."

In market movement Wednesday, the Nikkei 225 index in Japan dropped 1.32 percent, while the Shanghai composite index in China lost 3.09 percent. The Hang Seng index in Hong Kong dropped 2.59 percent, while the Sensex in India gained 0.5 percent.

The S&P/ASX 200 in Australia dropped 0.64 percent.

In midday trading in Europe, the FTSE 100 in Britain shed 0.4 percent, while the DAX 30 in Germany rose 0.2 percent. The CAC 40 in France slipped 0.13 percent, while the pan-European DJ Stoxx 50 lost 0.09 percent.