They completely missed a catastrophic bubble that had disastrous consequences for the nation. Banks and lenders were making money so they preferred not to see the problems that lie ahead. By 2006 the bubble already showed signs of popping, and still Fed policymakers were tragically ignorant.

An introduction to the theory of oligarchy in practice today.

Lost Decades looks at why the explosion of debt happened through the traditional lens of supply-and-demand. It examines the motivations and situations of people on both side of this debt. Why did demand for debt increase in the United States? The first reason Chinn and Frieden identify is the huge deficits run during the George W. Bush years. These are the trillions spent on the Bush tax cuts, the expansion of Medicare part D and wars in Iraq and Afghanistan that weren’t paid for.

Dean Baker reminds the media and former Federal Reserve Board Chairman Greenspan that the Fed actual has readily accessible data that contradicts Greenspan’s recent statements on the economy. The data was clearly signaling a dangerous housing bubble.

The Final Report of the Financial Crisis Inquiry Commission is a fascinating history of the Great Crash of 2008. Join us as FDL’s Ed Walker hosts a special FDL Book Salon chat with Commissioner Byron Georgiou about the FCIC’s findings.

In The Monster, Michael Hudson gives us a detailed account of the how Roland Arnall created Ameriquest and made it into the giant of subprime lending. In the process the book implicates the major Wall Street firms, most importantly Lehman, who eagerly packaged junk loans into mortgage backed securities and more complicated instruments. He also notes the corruption of the three major credit rating agencies, who received big fees for giving these assets investment grade stamps. The list of aiders and abettors includes Massachusetts Governor Deval Patrick, California Governors Grey Davis and Arnold Schwarzenegger, and even the community group ACORN.

The Financial Crisis Inquiry Commission report is sure to provide a powerful reinforcement to the growing lack of faith in elites and especially the financial industry. Because they will outline, in painstaking detail, how the financial meltdown of 2008 was completely avoidable – the result of policy failure at the highest levels of government and Wall Street, failures that bordered on criminal and that have never been fully adjudicated.

In Mark Harris’ classic baseball novel, Bang The Drum Slowly, players and coaches for the mythical New York Mammoths (modeled after the New York Yankees) fill the dead hours spent in hotels while on road trips by adjourning to the hotel lobby where they make a show of playing a card game called “Tegwar”. Tegwar (The Exciting Game Without Any Rules) is a con game whose express purpose is to extract as much money as possible from the passing starstruck fans who want to join in yet don’t want to appear like rubes by admitting that they don’t know what the hell is going on in the game. Befuddled by nonsensical winning hands like Red Rooster, Banjo, Coney Island Tatey or Butchered Hog, but caught up in the glow of hanging out with real live major league ballplayers, the fans are easy pickings and, unsurprisingly, the ballplayers always win.

It’s a sad commentary on American politics that the only honest man left on the playing field, when it comes to the deficit, is Alan Greenspan.

Alan Greenspan addressed the Aspen Ideas Festival yesterday, and Ezra Klein snagged some choice quotes. Greenspan remains committed to the idea that deficit reduction must occur now, in the midst of mass joblessness, even though all of the warning signs that would lead you to see deficit reduction as in the nation’s economic interest don’t exist at present.