What the financial sector did by peddling derivatives based on sub-prime and alt-A loans was bet big on a perennially losing team to win. To blame the team that everybody expected to lose for not winning is nonsense.
The financial sector, through its debt-financed speculation, has been driving the economy for decades, and there is nobody else to blame but the financial sector for the financial crisis and the current economic situation.
Unless and until the economics profession comes to grips with the effect of debt-financed financial speculation on the economy, it will remain useless as anything other than a propaganda tool. Of course, until we start tracking granular data regarding debt, how it is allocated and for what purpose, the economics profession won't be able to rise to my challenge.
