2008 will go down in history with years of other drastic financial meltdowns, such as the 1973-4 market collapse, the bankruptcy of the Penn Central railroad in 1970, and, depending on the future, the stock market crash of 1929.
What it really should be remembered for is teaching the consequences of a total lack of discipline among those in position of power and trust in the private sector. Executives, only nominally restrained by pliant boards of directors, wrote themselves blank checks, while creating a system that gave absolutely no incentive for anyone to care about the success, failure or economic viability of undertakings.
For example, back in the day, mortgages were written and held to maturity by local financial institutions with deep roots in the communities in which the borrowers lived. This had the salutary effect of making borrowers reluctant, from a social point of view, to renege on their obligations. It also made the lenders care deeply about whether the borrowers could afford the obligations they were undertaking. The securitization of mortgages created a situation where borrowers no longer had exposure to personal opprobrium for being "deadbeats" and lenders, having already received juicy fees for "originating" mortgages, cared not a whit if the borrower could or would pay. Appraisers knew their job was to certify that the loan to value ratio was sound.
The amounts that were made in fees generating these financial instruments were enormous. The "bankers" and other people involved in this process earned fees and commissions that enabled them to live large. My community, an upper middle class to upper class community is filled with "financial consultants" and "financial advisors" living in houses worth $1,200,000 or more at the height of the folly. In fact, this heavily securitized debt was almost as illusory as the "Ponzi scheme profits" generated by Charles Ponzi in 1919 and Bernard Madoff for thirty or more years ending in December 2008.
The securitization debacle toppled noted financial institutions as Fannie Mae, Freddie Mac, Lehman Brothers, Bear Stearns, Merrill Lynch and others; the Madoff scandal brought down charities and universities and countless other entities throughout the world.
For a long time, I always wondered how many of my brethren afforded their standards of living. The large houses, BMW’s, second homes and ritzy vacations. Now I know the answer; they never were able to afford these. That doesn't mean that all people of means are phonies; only some are.
What has been lacking is any sense of maturity and discipline which the authors of deregulation assumed business and community leaders would show. Freedom is not license. These same people, who for years would not deign to even talk to those not "intelligent enough" to understand the mumbo jumbo of meaningless financial devices, are now crying for their "bailout". Sorry, these people can fly to Washington on commercial flights. They are not to rich or important. They are Americans, just like me.