Tony left a comment on the Interview with Weakonomics. Here is what he said:
A great interview, thanks.
I have a similar point of view (I was a UK bank insider until the end of 2007) and can tell the same story: there was a “groupthink” that residential (and commercial) property would keep rising in value indefinetely – it didn’t matter if a borrower defaulted on their loan as the bank could easily resell the property and clear the debts. EVERYONE was responsible: bankers wanted their bonuses, shareholders wanted more dividends and ever increasing capital growth, home owners and property investors (speculators may be a better word) wanted more and more growth, the Government were happy to collect more taxes from the illusory growth, and we all kept borrowing (either against property or on credit cards etc). TV programmes, newspaper articles and dinner party conversations all said that you were mad if you didn’t borrow as much as possible (insane amounts) to invest in property! The “bubble burst”, “the wheels fell off”, but the Government and the banks have learnt nothing and just want to get the same mad process going again.
I suspect that the USA is rushing to do the same. More regulation won’t help if the drive from the top is to print money, lend more get a real estate boom going!
That comment prompted me to think and research about “Groupthink” and the result was this post about groupthink on The Digerati Life. Be sure to check it out.