Torture versus collateral damage; the bigger evil?

[motorfirebox]

I understand that if all those loans had not been forced to be made the whole thing would not have happened. I understand to that one reason all the various shenanigans went on was because the gov wasn't doing things like watching what was going on. I understand that the banking sector is too bigger to fail than it was before. I understand that much.

Then you understand nothing. Silver Thursday happened just fine without the government forcing anyone to buy anything. As for the government not watching what was going on--the government, at the behest of the finance industry, passed that responsibility down to private enterprise. Oops.

Uh, Fannie and Freddie were/are monstrous entities that pretend to be private institutions while taking advantage of the perception that any failures they had would ultimately be paid for by the taxpayer so that made them less risky...taxpayer money you see.

That's not what was being discussed, and not what you agreed with Dayuhan over. Dayuhan specifically mentioned securitizing bad debt as a factor in the crash. Securitizing bad debt is a completely separate concept from taxpayer backing of bad debt.

One thing I see is investment bankers gave an awful lot of money to the campaign of Mr. Obama and that many of the high up guys dealing with investment banking issues in the gov were formerly investment bankers.

Yes. It's unfortunate. Obama has shown slightly more willingness to restrict the finance industry than the GOP, but won't go so far as to throw people in jail for fraud on a scale that makes Bernie Madoff look like a three card monty hustler. So, because the Tea Party is even worse for the markets than Obama--seriously, trying to cancel the debt limit? Do you want to kickstart the zombie apocalypse? Wait, don't answer that--they've thrown their weight behind the Democrats. For the banks, it's a choice between total disaster and a slap on the wrist. For the lower and middle class, it's a choice between total disaster now and total disaster over the next few decades.