>>>>>You already know the cure for ineffective regulation is MORE REGULATION!
>>>>
>>>>The Bush administration and GOP failed to provide needed government oversight of the mortgage-backed securities market - we all know how that turned out. Meanwhile the GOP still wants deregulation and still thinks trickle down economics will work. You'd THINK they would learn - but guess not.
>>>
>>>You do know that the crazy mortgage market was caused by government oversight and regulation, right?
>>
>>Not true: https://www.washingtonpost.com/news/wonk/wp/2013/02/13/no-marco-rubio-government-did-not-cause-the-housing-crisis/
>>
>>http://www.cbsnews.com/news/loans-to-low-income-households-did-not-cause-the-financial-crisis/
>>
>>This was one of the best things I heard or read to understand the financial crisis: http://www.thisamericanlife.org/radio-archives/episode/355/the-giant-pool-of-money
>>
>
>Tamar, thanks for the links.
>I will have a look.
>
>It is pretty obvious that we have a different belief system
What in those links points to a belief system that differs from yours?
A first grader knows that the government controls money flows, and any disturbance in the money system lies at the feet of the government.
Saying that government regulations caused the financial crisis is a truism. Of course they did.
There are lots of discussion points here, and they all involve actions that the government might or might not have taken before the crisis.
I was running an IT department at a Wall Street firm when GNMA securities first became the vogue during the mid 80's.
They were hot. I couldn't find enough programmers to support what was going on.
The story was simple - the mortgages were guaranteed by the US government, so the cash stream was guaranteed.
That was the beginning of the CDO (Collateralized Debt Obligation) market, where people bundled GNMA mortgages into jumbo instruments that could be tranched and sold in pieces. The profits were so high that non-GNMA mortgages were bundled.
It could have been stopped at any point by the government and it wasn't. What followed was the normal curve of any market - it expanded till its excesses consumed it.

Unanswered here is the question of what penalties should be imposed on people such as salespeople at banks and employees of rating agencies who knowingly misled investors in these securities.
We should also be looking at bringing regulators who closed eyes to justice.