The financial crisis was caused by the US Government in an effort to buy votes and further the prospects of the the Democrat Party and Progressivism.
The financial services executives operated in the milieu created by government policies. They indeed greased the wheels and enabled the bubble to develop, but they were simply responding to artificial needs generated by government policy. It is true, their competence in so responding lined their pockets and allowed the bubble to grow really big before it finally burst. But the fact remains, it was the government's fault.
So, no, they shouldn't be prosecuted. And if the sheeple find that outrageous, they have only themselves to blame for voting wrong.
Exactly.
In creating mortgage pools and determining risk, lenders depended on algorithms that had been accurate for 80 years:
(1) There had never been a prolonged or significant drop in national home prices since the Great Depression.
(2) Even during the worst recessions, the national mortgage default rate rarely exceeded 7%.
In 2006, the blind spot in those algorithms was that ALL the malfeasance and ALL the fraud was going on at the one-on-one level, between the individual home buyers and the mortgage brokers, so it was essentially impossible to measure the scale of this disaster before the Crash.
This created two critical problems:
(1) Prices for homes exploded upwards because millions of previously unqualified buyers were allowed to enter the market.
(2) Almost no one understood that millions of new buyers were moving into homes with no down payment, and with mortgage payments that were often equal to, or less than, the rent they had been paying. Thus, when they lost their jobs, or when the price of their new home dropped 25%, they just walked out the front door, rented a new apartment, and never looked back.
This is why home prices collapsed by 50%, and default rates reached 35%, in the worst hit areas.
It's also important to recall that the mortgage crisis was INTERNATIONAL, not just in America.
Spain, Ireland, and parts of eastern Europe had a housing collapse that was at least as bad as the USA.
“The financial crisis was caused by the US Government in an effort to buy votes and further the prospects of the the Democrat Party and Progressivism. “
Convenient story, not accurate. The private financial sector lobbied hard during the Clinton years to be allowed to get into the lending that generated the bubble. They cultivated the subprime market without being compelled to make those loans in the slightest. Only commercial banks were covered by the CRA.