New Yorker on the Financial Crisis

Insightful short piece by James Surowieki commenting on discussions at the US Financial Crisis Inquiry Commission. Bottom line:

"In a way, the moral-hazard argument ascribes far too much foresight, intelligence, and rationality to the banks. It assumes they were coldly calculating the chances and consequences of failure and forging ahead nonetheless, when the reality seems to be that for the most part they were blissfully ignorant and arrogant about the flaws in their lending and investment strategies. The crisis, in that sense, was caused less by the fact that the banks were too big to fail than it was by the fact that they never seriously considered the possibility that they might fail."

Feels right to me.