And just as the last twenty years of unpunished financial crime constituted a green light for the bubble, so, too, America's non-response to the bubble and crisis is setting the tone for financial conduct in the future.
Over the last thirty years, in parallel with deregulation and the rising power of money in American politics, significant portions of American academia have deteriorated into "pay to play" activities.
One fascinating question about the financial crisis is how and why the CEOs of major banks could have tolerated behavior that destroyed their own companies.
In that situation, and over the intervening three years, what did President Obama do? Well, we got a stimulus package, and then a year later a watered-down, absurdly complicated new law that addressed everything except the most important issues. And that's about it.
What unites the midterm election results, the Federal Reserve's decision to spend another $600 billion to keep interest rates down, the failure to address the foreclosure crisis, and America's worsening relations with its G-20 partners? And, more generally, what explains the Obama Administration's toothless response to the financial crisis, in particular its reversion to status quo regulatory and economic policies, over the past two years?
In the worst financial bubble in history, nobody committed a crime. It was possible to conceal liabilities, inflate assets, bet against the securities that you sold as totally secure, without committing a single fraud. Isn't that amazing?