An article by Barry Ritholz describes the new story, called by Ritholz "The Big Lie", circulating about the causes of the financial collapse. In the article, Ritholz uses historical fact and reason to show how the financial collapse really got started.
The important thing about this is that it's not one party, but a failure of government to keep itself independent and free from the special interests of Wall St. It has nothing to do with the ethics of regulation, but the ethics of lobbying and the hijacking of our government by narrow interests. To be sure, deregulation played a part in the collapse, but it was the willingness of our lawmakers to hand the keys to irresponsible and money-driven speculators that ultimately caused the crisis.
In the presidential race right now, every single GOP candidate has used this Big Lie as their explanation of events leading up to the collapse, and the reason they support further deregulation. In particular, Ron Paul has been an outspoken opponent of any and all regulations on the market, believing that a true Free Market will be able to govern and regulate itself. As much as I respect Ron Paul for his unwavering commitment to his ideals, I think he's dead wrong here. Look what happened when restrictions were loosened just a bit. Even if you believe that government regulations pushed investors to act in a reckless manner, you're still left with the facts that a) those investors got insanely rich, b) they continued these practices to their own near-ruin, c) they contributed (or caused) the massive gap between rich and poor, and d) they are still benefiting from our economic climate. So, if you want to say that they are the victims, that's only playing one side of the truth. You've got to concede that, even if they were forced to make massive profits by the government on the backs of the people, they didn't complain and they didn't stop.
To further dismantle the protections that keep our economy solvent when we are so close to economic distress is completely unrealistic and downright dangerous. What would people think if, after the Titanic went down, professionals said it was because of excess lifeboats and that, if those lifeboats had only been left behind, the Titanic wouldn't have sunk. This explanation completely ignores the fact that the cause of the crash was an iceberg, one that the crew saw but was unable to avoid because they had gathered too much speed and had a rudder that was too small to maneuver. It ignores the fact that this cause of the crash was foreseeable and preventable, but was not taken into account until too late. And it ignores the glaring fact that the lifeboats being debated saved the passengers that were able to use them. In fact, they're the only things that kept the Titanic from being a total loss.
Our economy was brought to its knees by rampant trading by a money-hungry investors looking for more and more wealth in an unsustainable system. We need to protect ourselves, our economy, and our money, from these acts in the future.