Quote Originally Posted by carl View Post
When stripped to its essentials, the recent big economic crash was caused by a bunch of people who couldn't pay their mortgages.
No, that was a mere symptom.
That was (a) the grand scale resource misallocation away from (re)investment in production capacity and infrastructure into consumption.
The banks were (b) incompetent enough to fail entirely in their (systemic) risk management as a system. They believed to have managed their risks with diversion, but the diversion was nil at the aggregate level of the entire banking sector and on top of that they were connected to each other enough (with pointless reciprocal lending) that they turned into dominoes.

So the big story was the gross incompetence of the banking sector and the lack of effective government oversight.

To blame it on lenders is disingenuous.