> Was the last global financial crisis not caused by idiotically lax lending conditions No. It wasn't. The housing market began collapsing in certain states a

> Was the last global financial crisis not caused by idiotically lax lending conditions No. It wasn't. The housing market began collapsing in certain states as early as 2006 and many banks had problems then. The wider crisis only happen once the central bank totally misjudged the monetary conditions and let demand collapse. They were talking about high inflation fears in 2008 when it was clear that NGDP was dropping like a stone (look at FOMC meeting in November of 2008). The real 'Great Recession' meaning the large bank failures and the even most of the housing problems outside of the original crisis states only happened after that. The effect of bad house lending was visible from 2006 but that should not effect all other industries unless the broader monetary system fails. My favorite 1h talk on the subject: http://www.econtalk.org/archives/2015/12/george_selgin_o.html http://www.econtalk.org/archives/2015/12/george_selgin_o.htm... > And that was in turn because banks can lend deposits without blocking access to that same money by the depositors? That is how the monetary system has worked for 200 years. Its hard to explain crisis by this alone. > However that's not inherently a bad thing. Digging holes in the ground and filling them up again is economic activity, but it's still a waste of time. You can not just assert that economic activity is wasted without having a story why that should be true. The investment are driven by individuals who want to improve their lives, not dig holes and fill them up.