My personal take on the collapse of the housing sector of our economy is that we have wasted way too much time trying to place blame on our own perceived bogeymen.  It's human nature: when something goes wrong the first thing we want to do is figure out whose fault it is and then yell for them to be punished severely. 

The problem with assigning blame in the housing meltdown is that there are so many people and institutions to blame, and just about everybody is picking their own bad guy based on their own preconceptions. If you're somebody who sees people who use social services as leeches on the rest of us then you're quite likely to lay the blame at all the people who took out loans they couldn't pay, and you may not even consider that when people took out those loans they could pay them but then lost a job and the situation changed.  If you're somebody who sees the world through a "the Man is out to screw all of us" lens then you're likely to lay the blame at the feet of all the corrupt banksters who are funding their corporate jets by defrauding regular ol' working slobs like you and me.  If you're someone who thinks all government is bad then you're likely to blame the entire fiasco on Fannie and Freddie. Funny thing is, you're all right.

So it would seem that assigning blame doesn't help us much because the entire system has been corrupted, but without at least trying to hold people accountable we set ourselves up to do this all over again. We need to make sure that when we do find people behaving badly that we do whatever we can to make sure they don't do it again and that we let the rest of society know that if they behave in the same way then truly painful consequences await them.  For this reason I don't think it's enough to reach financial settlements with institutions that packaged toxic loans and sold them as if they weren't the crap they really were; I think you have to go after the people who made those decisions and punish them individually.  Of course it will be difficult, but until you hit people where they live you aren't going to do much to prevent it from happening again. 

Probably the biggest mistake we could make would be treating this as a purely legal issue, because until we instill ethical and moral societal norms we will have done nothing to deal with our systemic problems. People who behave ethically do not make loans to people they are almost certain will eventually default, nor do ethical people walk away from a mortgage when their bet on the property value doesn't pan out.  That's why I find people like this guy profiled in today's Wall Street Journal to be our society's true jerks:

When Chris Hanson bought his $875,000 luxury condominium in Scottsdale, Ariz., four years ago, he could afford the $90,000 down payment.

He said he had no difficulty paying the $5,000 monthly mortgage on the three-bedroom unit, which has floor-to-ceiling windows and views of Camelback Mountain. The condo is in a gated complex with a gym and pool.

And, true to his word, he didn't miss a single payment—until last month. Concluding that the home, now worth about half of what he paid, won't recover its value for at least 10 years, Mr. Hanson decided to walk away.

"It's a no-brainer once you do the math," said the 27-year-old real-estate investor.

He plans to let the lender foreclose on the home and rent an even nicer unit in either the same complex or one nearby, which he figures will cost less than half of his monthly mortgage payment…

Mr. Hanson runs an investment firm that buys up foreclosed properties and resells them. He said the company buys two to three homes a week at prices ranging from $15,000 to $1 million; they've recently expanded into distressed multifamily homes. He said he realized months ago his home would take years to recover its value but decided only six weeks ago to stop making payments.

He worried that wrecking his sterling 800 credit score would make it harder to run his business. But, in the end, he said he decided it was worth the risk.

To make my point, Mr. Hanson should have to worry about more than his credit score as a consequence of his behavior.  Part of me would love to see him go to jail, but more than anything I'd like to live in a society that would make his public shame so great that he'd never even consider walking away. Of course as long as man has inhabited the Earth we've had bad apples, but somehow I think our society has enabled far more of them than is even remotely acceptable.