O.K., the other obvious culprit is financial deregulation — not just in the United States but around the world, and including the removal of most controls on the international movement of capital. Banks gone wild were at the heart of the commercial real estate bubble of the 1980s and the housing bubble that burst in 2007. Cross-border flows of hot money were at the heart of the Asian crisis of 1997-98 and the crisis now erupting in emerging markets — and were central to the ongoing crisis in Europe, too.
In short, the main lesson of this age of bubbles — a lesson that India, Brazil, and others are learning once again — is that when the financial industry is set loose to do its thing, it lurches from crisis to crisis.
And, amazingly, it generally makes out quite well every time. Aim the free money spigot at us or the world gets it. If this is the system, the system is flawed. We don't need better firefighters, we need a better system. Only Larry Summers can save the world from Larry Summers is not a particularly compelling argument.