The economic disaster which took us to the brink of a massive depression in 2008-2009 did not have to happen. It resulted from the personal greed of Wall Street bankers and investment house executives. Alan Greenspan, the Chairman of the Federal Reserve (the Fed) from 1987 to 2006, said he miscalculated in his thinking that the Wall Street firms would not bring financial ruin on themselves. He did not realize that the system was driven, not by corporate health or profit, but rather by executive bonuses. (More on Greenspan) The executives at the top as well as the lower levels of the Wall Street corporations were making millions to billions from bonuses tied to financial instrument trading.  The financial instruments were packages of risky mortgages caught up in the insane upward spiral of housing prices.  Since they could permanently enrich themselves and escape on golden parachutes as their corporations disintegrated, they did not care what happened.  Through the spiral to disaster from 2000 to 2008, the Bush Administration, the Fed, and Congress looked the other way, not trying to put the brakes on what many independent economists warned was a disaster in the making.  Once funding only Republicans, the benefiting executives began to spread their campaign contributions to Democrats as the political pendulum began to swing that way.  See Campaign Finance Reform.

The bankers have testified that the financial crisis of 2008 was unforeseeable and won't happen again for a hundred years. (See economist Paul Krugman's treatise "Bankers without a Clue".)  From an historical perspective, financial crises (They were earlier called panics.) occurred frequently ( 1837, 1857, 1869, 1873, 1893, 1903, 1907, and 1929 More on this...) throughout the 19th and early 20th centuries. This stopped with the regulations put in place by Franklin Roosevelt when he signed the Glass-Steagall Act 1933.  In addition to establishing the FDIC, the Glass-Steagall Act prevented banks from also being investment houses.  That latter portion was repealed in 1999 and the buildup to the financial disaster 0f 2008 began.  Now in 2010 Democrats are trying to pass banking reregulation legislation (H.R. 4173). This reregulation has been weakened by banking lobbyist pressure on Democrats and is being opposed by all Republicans in the House. We need stronger banking regulation. This legislation should include the breakup of the "too large to let fail" banks in addition to prohibiting bank/investment house combinations.  It will only come about with the election of Democrats who will not be controlled by the lobbyists representing banking  executives  (e.g. Marcy Kaptur, Dennis Kucinich, ... and Bill Conner).