> 1) I wouldn't think of it as "cheating the system", but I would think of it as rational self-interest. Given a set of constraints, people will optimize for the best personal outcome.

In doing so they did break a number of laws, isn't that "cheating"?

But despite the technicalities, the point of it is that any adult could look at the results of their actions and decide that because they would produce negative outcomes for society that they should stop doing them, regardless of laws.

If these were Montana hermits hiding from civilization I'd cut them a break but these are giant institutions demanding not only legal protection from people trying to reclaim their funds, but bailouts as they hold our economy hostage.

> With that said, whose dishonesty is responsible for the housing collapse:
> * Were the homeowners dishonest for taking on loans they could not afford to pay back?
> * Were the lenders and real estate agents dishonest for making the loans to the home owners?
> * Were the finance guys responsible for thinking that risk could be mitigated using the tools of finance?
> * Were the investors being dishonest for cheering on returns that were above market-average without considering the risk?

Yes.

But the bankers who saw the big-picture were more dishonest and more responsible than the mortgage pushers and the investors who both should have known it was too good to be true, and all of them more responsible than the consumers who we don't actually expect to be actuarial experts, who did what their bank and society were encouraging them to do.

But yes, to the degree that they couldn't read that fine-print and educate themselves appropriately, then lobby to change things, they are ultimately responsible as they are where the government derives its mandate - to the degree that it does.

> Painting a market with the brushes of corruption and dishonesty does very little to advance an understanding of how the event happened and what can be done to prevent it in the future.

The reality is corruption and dishonesty, painting that picture is the only reasonable thing. Yes, we do need to understand that humanity is rife with the willingness to lie for gain, but we don't have to embrace it and treat it as okay just because it's normal.

"Normal" in that context is a branch up-side the head and the other guy is "right". But we strive for more than that, and need to be held accountable when we hurt others by failing.

We need reality-based finance, which assumes every other player is Mallory or Eve. Like with security.

> Goldman Sachs hires a lot of economists and finance guys, and they hire the people with the best resumes. One should hardly scream conspiracy if it turns out that some of these "cream of the crop" individuals end up working in the treasury. Statistically, the probability of it happening randomly is actually quite high.

Not at all. You approach it like working for or against corruption is the flip of a coin. Most people who'd go into regulatory agencies for reasons the public would approve wouldn't be interested in an industry job after. The fact that there's such a crossover only goes to show the positions are being held by amoral defectors.