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The always-astute Michael Barone explains why it was NOT deregulation that caused today's financial problems. As a sidelight (tooting my own horn), I would note, interestingly enough, this sentence from Barone's piece:

"Taylor writes that the financial crisis first became evident in August 9 and 10, 2007, when the spread between Libor interest rates and the three-month overnight index swap widened hugely."

That happens to be EXACTLY the time when i first started my regular warnings that monetary policy had baked stagflation into the cake. See this from Aug. 8, 2007, my very first blog post on the subject. Two blog posts later, this. A few minutes later, I even more explicitly tied the problems to the housing market. The next morning I was back at it, this time noting the LIBOR spread that Barone talks about. This kept on for a while in my blog posts, until finally I started writing full columns on the subject. My main reason to bring all this up is not to say I understood all of it then (I didn't even know then what a credit default swap was), but to say that one day before eveything started going haywire publicly (as ID'd by Barone), I had picked up on it and already said that the psychological panic response was the absolutely key thing to avoid, and that the Fed was inept at understanding that psychology. In short, I continue to assert that the Fed bears a large part of the blame not just for long-ago actions in 2002-2005, but all the way through this whole decade right up until now.