Causes of the Great Recession

You owe it to yourself to read this article in which The Wall Street Journal's David Wessel reports the results of a lengthy interview with Dr. Raghuram Rajan of the University of Chicago's Booth School of Business. Rajan has a really comprehensive view of the causes of the largish recession out of which we are still struggling. Rather than blame one player, he sees multiple villains:

When easy money pushed by a deep pocketed government comes into contact with the profit motive of a sophisticated, amoral financial sector, a deep fault line develops.

By "deep fault line" Rajan means a place where prosperity is likely to break. In a sense he argues everybody is to blame. Wessel's article contains much more for your consideration .

I think Rajan's argument understates the responsibility of our government which pressed mortgage lenders to lend to a diverse body of home buyers. In order to do so, lenders ended up making loans to many persons who were not credit worthy.