People smarter than I will have to figure that out. I'm talking about fairly soon after, before any investigation, we had politicians (McCain, for one) blaming "excess greed." I think this is a straw-man. The people in that job get paid to be greedy. You can't blame that, you have at least recognize that a system (regulations and work flow) is broken if it is so obtuse that people can't even know what decisions are in their own best interest.

I actually sort of see this as a real-life tragedy of the commons situation, although you kind of have to squint your eyes and wave your hands a bit to make it fit.

The "common resource" is the client opportunity. The Nash equilibrium is every employee maximizing their own bonuses. The group optimum is the health of the company. It turned out that the individual self-interest did not align to what was good for the health of the companies. And in fact, that if they had cooperated and worked for the health of the companies, the employees may have ended up with higher individual payouts. This is exactly what the tragedy of the commons is about, and it's what apparently shook Greenspan to his core. So basically, it was the (predicted (over and over again)) failure of Objectivism.

That's an interesting take. I always thought that they didn't know that their actions would result in such disaster.

I worry about the same non-effect with the gun-law blitz we're seeing after Sandy Hook. I worry that we're not attacking the problem- which may have more to do with mental health issues than gun laws.