Had enough yet?

[geek tragedy]

88. No, that is a claim and an opinion, not unlike those who write "Fact: Fannie and Freddie

and the CRA are to blame for the housing crisis."

It's very easy--and lazy--to blame the great shitpile of 2007-2010 on any one cause or person or group of people.

There was an asset bubble (both stocks and real state) created by Bush's deficit spending during full employment.

Financial deregulation did make it easier and incentivized risk taking that left the entire system holding the bag if bets didn't pay off. And that risk-taking was conducted by the greedy, the reckless, and the stupid.

The mortgage industry was in turn too greedy and sought to churn out high yield, high risk mortgage products under the assumption that the asset bubble would continue, that the music wouldn't stop.

Appraisal fraud, and mortgage fraud, took off because no one would get caught, because no one was looking, so long as housing prices continued to rise.

Investors helped drive the bubble because who wanted to invest in the company promising 3.5% annual yields on low risk investments when someone else was promising 6% yields on no risk investments.

Homeowners using their houses as a short-term piggy bank to buy cars and finance other consumption not only helped drive the financial crisis, but also helped drive the asset bubble, which then caused even more risk-taking, etc etc.

Geithner was head of the NY Fed. He wasn't a banker making bets, or taking risks, etc. He certainly was too concerned with protecting wall street institutions as secretary of the treasury, but he didn't cause the crisis. He could have done more to stop it and was not a great regulator, obviously, but it's hyperbole to call him one of the arsonists.

Deregulation would have happened with or without Larry Summers. He was wrong, but deregulation was a fait accompli after Citibank's acquisition of Travelers depended upon it.