Additionally, the government itself was a large player in pushing the mortgage crisis. From keeping interest rates low, to encouraging lenders to get loans for those who couldn't afford them, to the implied bailouts (which turned out to be true) that only encouraged reckless behavior. If they look too hard they'll have to look in the mirror and that will never happen.
Unfortunately much of the things which were happening leading up to 2008 were not illegal, which is why there haven't been many prosecutions. Doing shady things and passing the buck, moving risk to other parties? Yes, but unfortunately not against the law.
Indeed. If we criminalized being shady most business owners in the continental US would be behind bars. Selling overpriced phones? Apple. Selling overpriced junk food? McDonalds. Selling overpriced headphones? Beats. Selling overpriced housing loans? Banks. Selling overpriced jeans? Levis. Selling overpriced smelly water? Perfume companies. Selling overpriced hydrocarbons? Deodorant companies. Overpriced sugar water? Coca cola. The list goes on and on and on.
The system we live in is designed around rewarding people who can extract capital from others. That means everyone's fucking over everyone and only the most clearly fraudulent transactions are regulated away to minimize externalities.
Is it optimal? No. But that's the reality of the system we live in.
