When Phil Gramm lifted the restrictions on trading derivatives, that set the stage for an assortment of loan arrangers to package loans and peddle what were actually NINJA (No Job, No Income) loans falsely rated AAA, when they should have been rated ZZZ. THey got big commissions and eventually the loans went into default. And No, Barney Frank did not make anyone offer or accept these loans.
I like your short synopsis , there is a proper government role in regulation and fraud prevention , which role was poorly performed in the cases that we are discussing but,Barney was indeed involved.
Also isn't there a problem caused in the government encorageing or even subsidiseing poor business practice? With government rewards giveing advantage to the unwise you might argue that the wise were not prevented from still being wise , but the government involvement left the wise a bit behind while the subsidised unwise captured market share, grew large ,.... too large to fail.
Another thing that happened was money market funds breaking the buck
http://www.investopedia.com/terms/b/broke-the-buck.aspto me that indicates an overuse of commercial paper to bridge too many gaps, were too many people on the payroll?
