Are We To Believe that Greed is Localized?

Mark Perry has penned a must-read, albeit brief, analysis of the financial crisis that debunks the myths that the crisis was a greed-fuelled, Wall Street created monster. To achieve this debunking Perry asks the questions that no one has asked - "Why then?" and "Why housing?" In the rush to serve their interest and goals, politicians and the media have bent every sail to pin everything on "Wall Street" and bankers, but no one asks, why, given that lending to creditworthy homebuyers has been a safe and profitable business for over a hundred years, did things change? Did bankers just wake up one day and cast aside decades of experience and prudent practice and go a little bonkers for the fun of it? Perry asks this and takes it further, why did the underwriting standards not collapse similarly in other finance sectors, how can we possibly claim that greed ran rampant in the housing sectors, but not elsewhere? If the political class's conclusions are to be believed, we have to then believe that you can somehow wall off greed? The answer, of course, is that distortionary structures created through government intervention created bad incentives and laid the foundation for misallocation of resources, which will always ultimately end in a reckoning (dot com bubble anyone?). This is nothing new, interventionism leads to corruption, not just in the legal sense but corruption of all things, corruption of the mind, of the conscience...