I've been trying to argue this meme with no success. It seems obvious to me that the cause of the current problems is the real estate bubble.
Tt seems obvious to me that a major component in causing the real estate bubble was low interest rate policy in the early 2000's. I know that the low interest rate policy was because of the stock market bubble collapse.
I am a student of stock market history (http://www.amazon.com/exec/obidos/ASIN/0595132421) I know that the 1990's stock bubble was completely unprecedented in at least two ways: (1) market valuations reached extreme all-time highs and (2) there was a capital gains tax cut made when the market was already modestly overvalued (recall Greenspan's Irrational Exuberance speech 7 months earlier).
It seems to me that the the purpose of reducing capital gains taxes is to promote capital gains, that is rising asset prices. Passing a capital gains tax in 1997 promoted rising stock prices in an already overvalued market, which is the definition of a bubble. Congress cut capital gains taxes again in 2003, this time in the face of record valuations in the real estate market with the same bubble-inducing effect as the previous cut.
It seems inescapable that capital gains tax cuts created our current problems.
This seems completely obvious to me. Why hasn't this idea gained any traction?