Shifting blame onto unqualified borrowers exonerates the responsible finance industry

Evidence

But it led to tremendous pressure on Fannie Mae and Freddie Mac-who in turn pressured banks and other lenders-to extend mortgages to people who were borrowing over their heads. That’s called subprime lending. It lies at the root of our current calamity.” David Min (2011), a financial analyst at the Center for American Progress, empirically refuted this displacement of responsibility. High-risk home mortgages precipitated the financial problem, but evidence pointed to unregulated banks as major contributors to the global economic crisis. They bundled the bad loans into obscure derivatives and sold them worldwide. A large cast of players had a hand in the economic disaster, including Wall Street bankers, lawmakers beholden to them, mortgage finance companies, subprime lenders, and federal regulators. Krauthammer exonerates the finance industry by invoking the isolated “bad apples” argument, as though only a few predatory lenders and traders brought down financial systems worldwide. — Albert Bandura, Moral Disengagement, 1521

Categorization

• XREF: Connects to the vault’s existing claims on displacement of responsibility and rationalization of harmful policy; Krauthammer’s bad-apples framing is a live specimen of moral disengagement.
• corroborated: 2 independent passages support this claim — Albert Bandura, Moral Disengagement: How People Do Harm…, 1521