I heard Ben Stein talking about the subprime meltdown, and he correctly allocated the blame between both the left and right. The Right pressed for deregulation at the same time the Left pressed for greater numbers of homeowners.
The result was that new incentives were created in the mortgage industry, breaking down old safeguards, with the effect of separating reward from risk; the institutions were rewarded for risky behavior, while the government (I mean the taxpayer) bore the risk.
And now we see the government providing loan guarantees for interbank loans. Once again, for the lending bank, the reward is separated from the risk.
Somehow I am reminded of the old maxim: "Idiocy is defined as doing the same thing over and over again, and expecting a different outcome".
