It has become so trendy to blame Bush that is seems nobody wants to look at what happened before him. You have Alan Greenspan "The Wizard" who worked with 5 presidents (both parties). It was the Clinton administration that appointed Robert Rubin as the Secretary of the Tresury (after 26 years with Goldman Sachs). Rubin brings in Timothy Geithner, and the outspoken Harvard boy Larry Summers. Time magazine puts them on the front cover as the commitee to save the world. Buried deep in the democracy was the the CFTC, chaired by Brooksley Born. She stumbles upon the 27 Trillion dollar dirvatives (black box) market that is going on with zero regulation. In 1993 Proctor and Gamble sue bankers trust for being scammed out of millions. Since it is unregulated, there is no way for the CFTC or anyone in government to look into it. Rubin finds out that Born is trying to get regulations into play. So he sicks Summers on her. Since her agency is appointed by the President, Rubin has no real power to legally do anything to stop her. They go to the FCC Chairman and The Wizard, for help. They go to congress and beat her silly in front of everyone to show why she needs to be put into check. Of course congress has no clue about anything, so they are just off the words of "the committee to save the world". So they ignore her warnings of the upcoming doom and possible econmic collapse. The hedge fund LTCM starts to collapse, as she warned. LTCM is the rock stars and a case study of arragence full of very liberal thinkers. Working with 15 of the biggest banks, they turn 5 billion into 1 trillon. Now there model is failing. Washington hears of it and panic. The government has 14 banks to buy up LTCM and stop the collapse. Now all the sudden more congressional hearing are called asking why no regulations. The "comittee to save the world" convinces them it was just a fluke. So no regulations were imposed. What they will do is put a freeze on Born and the CFTC, so she resigns. Banks have even more freedom to make even riskier investments. To a tune of 595 Triilion as it turns out. Almost 10 years to the day of her warnings and the freeze of CFTC, the collapse happens. The "let the market sort it out" of the Clinton administration had failed.
And the fact that you have to this day, people who try to apply systemic risk and moral hazard at the same time (when they are in direct conflict with each other) and you are just asking for more problems in the fufture.
I do not think the tea party or other oppenants of smaller government want no government or regulations. They want a smaller government that works. Not to continue spending more money to make it bigger so it continues to fail. There was big government in play back then and it failed. Making the government even bigger now would solve what? One part of government ignores the other. Making it bigger just makes the in-fighting bigger.
Adding insult to injury, Larry Summers and Tim Geithner are now Presidents Obama's top advisors. So what relly was learned. This goes way beyond a 15 second sound bite on the radical thinking of the Tea Party or the salvation of the "oh yes we can" current governments same liberal beliefs.