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I’m sorry to say it, but we’ve seen the enemy and the enemy is the American citizen.

The one constant in any economic or financial bubble is the over-exuberance of the masses.

The tech bubble was inflated by the aggregate excessive demand of each 401k holder that wanted to get in on the dot-com action. Wall Street just obliged (as they always do) by selling us more dodgy tech stocks and finding them wherever they could get an executive team with plausible CVs, even if the companies didn’t have a clue how they were ever going to be profitable. If we the consumer didn’t care, why should Wall Street care?

The housing bubble was inflated by the aggregate demand of each American home buyer who individually believed that houses can only go up in value, and that they DESERVED that 4000 square foot mini-mansion after their long hours at home. Wall Street just obliged (as they always do), and figured out ways to funnel more money to our demand for loans, by securitization which allowed Americans to, in essence, borrow from every source of capital in the world..

The fact is that no government, and especially not a democratic government, can help a populace that is individually and collectively lacking in prudence.

Sure Greenspan and Frank and Dodd and Paulson and Bernanke poured gasoline on the fires, but they would have been replaced if they didn’t. As long as the public thinks there is a free ride to wealth, anyone that promises it will be exalted, and anyone that hinders it will be shoved aside.

I guess I take exception to that broad statement characterizing the American Citizen. Qualify that with many citizens - OK, I agree.

I still live in a modest house of less than 2000 sq feet which we built in 1976, and all of the houses in our subdivision are modest. I am sure there are plenty of American Citizens who were also prudent in their housing choices.

The housing bubble was inflated by the aggregate demand of each American home buyer who individually believed that houses can only go up in value, and that they DESERVED that 4000 square foot mini-mansion after their long hours at home. Wall Street just obliged (as they always do), and figured out ways to funnel more money to our demand for loans, by securitization which allowed Americans to, in essence, borrow from every source of capital in the world

This, and add to it social engineering on the part of the federal government designed, at least in its most noble sense, to try and combat racism. The feds gave the private sector that lemon, and the private sector discovered how to make lemonade with it . . . because the feds were more than happy to buy back that lemonade at the end of the day.

Big government and big business created this mess, and yeah, the American public was only too happy to get swept up in it.