>The financial crisis was started by government interference in housing and changing of decades old lending and financial rules.
>
>I know that used to be a popular viewpoint but its most vocal claimants are falling quiet for increasingly obvious reasons.

"Used to be", as in last week? http://www.humanevents.com/article.php?id=32615
Has some new evidence absolving historical events come to light that I'm unaware of?

It's not past tense. The facts are clear. Without Fannie/Freddie there is no housing crisis. Without repealing Glass/Steagal the money isn't there to leverage. That you refuse to accept that which is plain as day does not change history.

>Government is not responsible for proscribing every imaginable ridiculous action that anybody might perform.

No one is arguing that straw man so there's no need to set it alight.

>In this case the bankers lobbied for change that they said would advantage the market and community, then they managed to set the ranch on fire and then they ran away rather than trying to put it out.

Who did they lobby? Why did they have to lobby? What rule or "Act", if you will, was standing in their way?

>Nobody made them do that

Following the fire metaphor, Congress gave them the matches (sub-prime backing & historically low rates) and the gasoline (depositors money)

>and it is not reasonable to expect government to create laws to prevent people poking their eyes out with a pencil just because it is possible to do it.

But it is reasonable to expect government to leave well enough alone the laws that have been working for decades to prevent just this kind of financial meltdown

>There has to be a balance between government "interference" as you describe it and an expectation that if allowed, the market and its practitioners will behave rationally.

We agree. I've stated before, bankers proved long ago that they cannot be fully trusted with other people's money. As such, laws were put in place to protect depositors. That's reasonable and was effective for decades. The government interference I refer to is the forcing of pseudo-governmental entities like Fannie/Freddie to use their position to manipulate the market to satisfy the politically expedient whims of the current elected officials. The result of which, combined with a catastrophic decision to remove depositor protections led directly to the meltdown. I do not absolve the bankers their responsibility, nor do I ignore that without the government actions, the bankers ability to wreck havoc doesn't exist.

>Even Greenspan agrees that the market lacked common sense and wasn't even capable of acting in its own self-interest which is about as dumb as a sentient being can get.

That Greenspan doesn't understand certain historical lessons in no way diminishes the responsibility those in power bear for their role in causing the crisis.