Join the Fool as we assess blame for this financial meltdown -- March Madness bracket style! Below is one of two semifinal matchups you can vote on … enjoy!

The case for Congress, by Rich Smith (TMFDitty)
"I've been waiting for you, Obi-Wan. ... The circle is now complete."
-- Darth Vader

Why start off Round 3 of "Stock Madness" with a Vader quote? Well, look at it this way. When this tournament of villains began a couple of weeks back, I acquitted credit raters Moody's (NYSE:MCO) and McGraw-Hill (NYSE:MHP) of causing the Greater Depression. I argued that Congress bore the greater blame, largely because Congress repealed Glass-Steagall, and unleashed the megabankers upon us. 

Today, my worthy opponent echoes my original argument -- that the people who broke Glass created the mess we're in. And me ... well, I'm going to pull an Obi-Wan Kenobi. I'm putting up my light saber, and conceding that these guys ruined our economy.

But here's the thing: These guys have a name: Congress.

Once, twice, thrice guilty
Yet while Congress bears the blame for Glass-Steagall, that's not all they're guilty of. You see, big as it is, our financial crisis is greater than just the banking bust spawned by the megabankers and their derivatives. Today we face:

  • An energy crisis, made worse by Congress' failure to achieve energy independence, first called for by President Nixon 35 years ago.
  • An unemployment crisis, headlined by the slow-motion failure of General Motors (NYSE:GM), but fast spreading to Caterpillar (NYSE:CAT), Boeing (NYSE:BA), and scores of other companies handing out pink slips.
  • A debt crisis so large it busted the National Debt Clock wide open last year.
  • And then there's health care, and Social Security, and on, and on ...

Yet what has Congress done to address these crises? It's criticized AIG (NYSE:AIG) bonuses that Congress itself approved, rewarded lobbyist cronies with thousands of earmarks, poured untold billions into reanimating zombie banks and corporations, and taken a bold step to ban the interstate sale of monkeys.

Don't let 'em get away with it, folks. Pin the blame on those who deserve it most: Congress.

The case for the repeal of the Glass-Steagall Act, by Christopher Barker
We could chase our tails endlessly in this round, correctly pinning shame upon both of these donkeys.

Both options are somewhat messy given the overlap, but I encourage your carefully considered vote for the repeal of Glass-Steagall. Here’s why:

  • You'll get more bang for your vote. By selecting the repealers of Glass-Steagall, you will implicate not only the congresscritters, but also several presidents, Alan Greenspan, lobbyists, and industry executives from the likes of Citigroup (NYSE:C). As a bonus, you'll vent your frustration with scores of present-day blame-deflectors … including Speaker Pelosi and Senators Dodd, Hatch, and Hagel (all of whom voted to repeal Glass-Steagall in 1999).
  • Follow the derivatives. I pledged in the previous round to carry the torch for derivatives. This mountain of unregulated toxicity, which famously decimated AIG, presents the single greatest threat to our financial system. The lobbyists and executives who facilitated the rise of this shadowy market must be held accountable right alongside the lawmakers who served their agenda.
  • It's not your fault! If we selected Congress as the greater evil, would we not ultimately be blaming ourselves for voting these fiscal dimwits into power? Surely we can find more satisfying scapegoats than ourselves.
  • Time matters. My selection narrows down the more general Congress to a particular timeframe from the 1960s through 1999. The Congress that passed Glass-Steagall in 1933, for example, deserves none of our blame.
  • Congress is an incomplete answer. Talk about messy … short of a rare veto override, they can't pass a law without a president's signature.

Wisdom dictates that we examine events more intently than the players involved. While the players change, history repeats. Consider Thomas Jefferson's chilling pronouncement from 1814: "The crisis of the abuses of banking is arrived. The banks have pronounced their own sentence of death." Sound familiar? Keep it event-specific, Fools, and vote for the repeal of Glass-Steagall.

Check out the Fool’s entire 2009 March Madness bracket here.

Fool contributor Rich Smith owns shares of Moody's, which is also a Motley Fool Stock Advisor pick. Also, both Moody's and The McGraw-Hill Companies are Motley Fool Inside Value picks. Fool contributor Christopher Barker thinks March Madness would be a great name for Bernanke's quantitative easing initiative. Christopher can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He owns no shares in the companies mentioned.

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