| The financial crisis had many parents, including actions of government to exert control (law, regulation, lawsuit, political pressure), not just lack of control. The CDOs and such made things worse by helping to increase effective leverage, and by increasing the false sense of security to investments, but when so many people think that risky investments are safe, or that any investment is going to keep going up and up you can't regulate your way out of a bubble or a painful aftermath, except perhaps by regulating away most forms of investment and just destroying wealth creation all the way around. Regulatory changes could have reduced the impact of the bubble, but its not a simple matter of cde/cdo caused meltdown, or generally one of lack of regulation. It also wasn't a particuarly partisan crisis. Both parties promoted the idea of pushing home ownership to more and more people, the Democrats probably even more than the Republicans, but the Republicans where heavily involved as well. They took different paths, and helped create different parts of the problem, but they where both heavily involved in the government side of the problem. |
