Iraq is nearly over. BTW we won.

[Undertoad]

As near as I can figure out, we're both right.

Like modern airline crashes, the crash can't be pinned down to any single failure, but a perilous combination of them. Starting with the S&L failure, the community reinvestment act, the sudden need for backed securities and the eagerness of the congress to give it to them, the greed, the nest of backed and unbacked securities behind the mortgage market. The desire to put more money in the market. The desire to get poorer Americans into home ownership. The Countrywide "special loans" and lobbying and wheeling and dealing to preserve their setup and keep getting rich. Fannie Mae pushing ARMs because it was the only way they could keep growing. (By 2004 92% of FNMA-backed loans were ARMs) The sudden SEC deregulation was the final burst of too much water over the hull.

Nobody was smart enough to predict the combination of failures and everybody wanted to protect their phoney-baloney jobs. One obvious truth is that government can't really be trusted to ensure securities too far, because there's too much money and power to be gained; and thus we could expect the sort of wheeling and dealing where everybody could get a little richer and blame was spread around thin enough not to point the finger at any single entity.