In simple terms greed and fear drive markets. These broad generalizations provide easy categories for market events. Makes us quite dextrous when finger-pointing too. We can accuse while we recuse.

Maybe stock market crashes are not so simple-minded. Perhaps more complexity is involved especially when politicians stage their agenda.

Yesterday, I began wondering what reasons any legislator (Federal or State) might overlook sub prime transactions. Truck drivers heading down hinterland highways, llama farmers in Wisconsin, and the homeless sleeping on park benches on the New Haven Green knew about sub-prime mortgages.

Seems reasonable to think that the dinner conversation at the 701 Restaurant on Pennsylvannia Avenue where (according to the Washington Times), the menu delights include “an amuse bouche… finished with chocolate pave or rhubarb-and-strawberry compote surrounding a small almond cake” (just what we regular folk eat every day).

Between the delicate morsels (at tax payer expense), what did these folks discuss? Somebody must have noticed the economic fiasco on the horizon. Or, was there another agenda?

Is it likely that overlooking subprime transactions was part of a social agenda? Was there hope that permitting a disenfranchised class to own the “American dream” (even though unqualified) could change the social-cultural, and political structure of America? If they were having that conversation at McDonald’s or sitting on the Capital lawn with lunch bags, I might think so.

Housing does franchise the American dream; a family living in Lawrence, MA wants that dream as much as the family living in Manchester, MA. One family wins the social and economic lottery while the other suffers the fate of limited means.

If there were more Habitat For Humanity homes, and if more volunteers from places like Manchester, MA headed to Lawrence, MA, the desires of many would be met. The fulfillment of a dream would be kept. Of course, there’s one major rub. You don’t make big bucks building Habitat homes. The bank doesn’t earn a cent from the mortgage, and the homeowner just pays back the principle with a “sweat-equity” commitment. Not much of an economic incentive there; so greed prevails as the antagonist of hope.

For a more complex opinion, read “The Greed Fallacy” by Arthur MacEwan (Dollars & Sense, the magazine of economic justice).

Never have I observed such a dispirit mass of views, political dysfunction, and public confusion. Dispirit views can be expected whenever discussion ocurrs, but political dysfunction is not what a democracy needs. Public confusion erupts because there is a lack of government leadership and public knowledge. When a crisis arrives, no one can decide on what works, and no one leads. All parties appear to play the zero-sum game: give me all I want and I’ll give you nothing of what you want, or I’ll give up something as long as you know there’s hell-to-pay.

Most people get their stock market updates from the evening news. The excitement on the way up with the gloom and doom during a market correction. Very few get much of an education. Duncan Niederauer, CEO of the New York Stock Exchange recognized this by statiing that many voters fail to understand the inextricable link between “Main Street and Wall Street”.

American voters think this is a “bailout of Wall Street”. What we face is a “credit-crisis”. Small businesses faces payroll challenges, the U.S. auto industry has no wheels, and the housing industry has no foundation. As Secretary Paulson said, “…this is much too important to let this fail,” Paulson said.

House Majority Leader Steny Hoyer said, “Why should taxpayers loan out their own money to solve a crisis brought on by someone else’s greed?” He answered his own question by saying, “…in our economy, none of us is an island. A meltdown would begin…on a few square miles of Manhattan, but before it was over…no city or town in America would be untouched.”

Mutual fund, 401(k), endowment fund, and pension investors can blame Wall Street “fat cats”, but we all chased the mice. We all gloated and took pride in the numbers on our statements. “No city or town in America” ran from the market upside, but everyone wants to blame someone on the downside.

The greater the excess or hubris, the greater the humiliation. The greater the cynicism, the greater the deliberative dysfunction when seeking a resolution. The greater the market avarice on both sides of a trade (long by owning stock and selling or shorting a stock)the worse the results for everyday, steady-hearted investors.

We can only hope that time and sensibility return our sanity. We can only hope that the stock market becomes a thermometer of economic growth, research and development, entrepreneural innovation, and a cooperative effort to keep this planet revolving for our kids.