TNR has a crisp review
of what happened. It's bullet points are:
- First, there was a stand-down of the financial police.
Second, the response to desupervision was a criminal takeover of the home mortgage industry.
Third, the counterfeit mortgages were laundered so they would look to investors like the real thing. This was the role of the ratings agencies.
Fourth, the laundered goods were taken to market.
Bush and Obama administrations are critiqued by the author, James K. Galbraith.
Of interest, Galbraith calls the deficit hawks a different name: Deficit Hysterics
. I wonder if that will catch on.
It's a good read.