This week's 60 Minutes included a story about what have been called "financial weapons of mass destruction"--credit derivatives or credit default swaps.
CBS News' Steve Kroft reported that a vote in Congress in 2000 on an obscure bill called the Commodity Futures Modernization Act of 2000 was one of the causes of today's meltdown on Wall Street. (Disclosure: CBS News and CNET share the same parent company.)
That broadcast inspired the editor of a political watchdog site to post a list of the current members of the U.S. Congress who voted for the final legislation (it was wrapped up in one of those supposedly must-pass spending bills to keep the government running).
Translation: If you didn't like their vote eight years ago, feel free to take out your frustrations next week on Election Day. Of the politicians who voted "yea," 155 are up for reelection.
The Web site, WashingtonWatch.com, is edited by Jim Harper, a Washington, D.C. lawyer who's a policy analyst as his day job. He acknowledges that the legislation (overriding state laws restricting credit default swaps) was a minor part of a mammoth spending bill.
But Harper defends the scoring thusly: "Now, is it unfair to blame House members and Senators for letting this small provision through in such a large bill? Heck No! They collectively let the annual spending process get out of control. This lead to the gigantic bill with the derivatives gambling provision in it, which is now a cause of our economic collapse. They should be held responsible individually for the results, and hiding from their responsibility in collective shirking will not do."
As important as credit default swaps are, that's not the whole story. Also playing a role were the Federal Reserve's artificially low interest rates, the capital gains exclusion for home sales, the Community Reinvestment Act, Fannie and Freddie relaxing lending restrictions, the mortgage finance companies' successful lobbying to thwart oversight, government regulations encouraging a securitization frenzy, and unscrupulous lenders and unscrupulous buyers. Anyone up for creating that voter's guide?
Correction, 8:07 a.m. PDT: An earlier version of this story gave an incorrect domain for the Web site WashingtonWatch.com.