Question

Did political action save us from the disastrous consequences of the 2008 crisis? Did the politicians inadvertently cause the crisis and then attempt to shift the blame elsewhere?

Answer 1

In my opinion, the politicians inadvertently cause the crisis and then attempt to shift the blame elsewhere. The 2008 financial crisis was an "avoidable" disaster caused by widespread failures in regulation by government, corporate mismanagement and heedless risk-taking, according to the conclusions of 545-page Financial Crisis Inquiry Commission (FCIC) report. The government regulations could have prevented or mitigated the credit crisis of 2008. The Bush administration could have avoided, or reduced the effects of, massive financial crises, if they had acted in time. Administration could have reduced the outsized fiscal deficits that spurred foreign borrowing, thus could have acted to slow an overheated economy. The Federal Reserve could have raised lending rates, as a result would have prohibited homeowners to borrow money, and thus decelerated the credit boom. More robust financial regulation i.e. being more stringent about implementing prudential principles to all of the complex financial operations in which financial institutions were engaging. But instead, none of these government agencies did anything.