So who, exactly, is responsible for the meltdown on Wall Street?

I saw a link to this today. In it there are some juicy bits. Like this:

Hmmm ….

Ok … what is Glass-Steagall?

What went wrong was that the housing bubble, which was quite speculative in Florida and Las Vegas, burst. Elsewhere, we had unsustainable growth in “value” of housing. But this story is … well … prescient … and not in a good way …

Ok, thats just plain old scary. Of course, other elements are to blame as well … it turns out that well intentioned efforts may have forced an increase in sub-prime lending [though to be frank, there is a great deal of political spin around this … no one wants to be seen being in the wrong here]. And then the de-regulated Wall Street could create derivative financial instruments out of them. With speculation ensuing. Continuing on the NYT article:

What I have read/heard in recent weeks, has been that the primary cause of a strong recession turning into a depression was the tightening of the money supply (increasing the cost of capital by raising interest rates, so that credit was harder to get … sort of like now, but with a lower interest rate), and the raising of taxes, which further pulled capital out of the market. Both of these were combined with Smoot-Hawley to “protect” American jobs and markets … and the combination dealt an almost knockout blow to the economy. It required, basically, World War II to pull us out of this funk. We deregulated Wall Street, and forced an increase in subprime lending. Capital was cheap, freely available, house prices rising fast. All we needed was a catalyst to cause the implosion. Push people past their ability to pay for everything … many were barely above water and treading hard. Say, like … I dunno … increasing oil prices so that gas and other derivative product prices rose. Hold them there for a while. This mess could have been prevented. Maybe we will do something right this time.