It wasn't laws that caused this problem. It wasn't the peoples fault either. It's the appearance of a fatal flaw in the entire monetary system.
Most people don't really know how money is made or how it's value is determined. And it's value is based almost solely on debt and loans, which is how this crisis started and why this turn of economic turmoil is significant.
Lets say we want to start a bank and we got $10,000 to do so. The feds then say "ok, with $10,000 you are allowed to lend out $50,000." So now we loan out $50,000 and we have notes (iou''s from the loaners) for that $50,000 dollars, which we can now use a liquid assets and then return to the fed and say "hey we now have $50,000" and they'll say "Great now you can loan out $250,000". And the process then repeats itself over and over again. And yes the banks are basically making money out of thin air.
Remember awhile back when there were different kinds of banks. These different banks were allowed different loan mark up. Investment banks would be able to lend out perhaps 10 times the amount of assets that they held where as you neighborhood bank would only be allowed to lend say 4 times their assets. This was done purposely as a safety net for most people (middle class and lower). However in the 90's with the tech boom and the housing boom, the feds raised the amount for all banks to nearly the same line, so the safe banks and the investment banks could reap the rewards, and so now everyone was in on it.
Now because banks are making money by lending money it was in everyones best interest to keep it going. Soon they were financing everyone for anything. The market was going well and people were taking loans for risky investments in the various markets and real estate (flippers). The smart ones saw the bubble was going to burst and took all the money out of real estate and dropped it into oil (when the prices sky rocketed last year). Then finally everything dropped. And now the flippers and the investors started defaulting on their loans which basically took away all the assets that the bank had been using to secure further loans. Basically, the middle fell out of the structure.
No one and everyone is really at fault here. The problem is basically that there is no value in money period (most the civilized worlds money system is done the same way). The problem is the entire monetary system is all smoke and mirrors.
Theres a video called "money as debt"
http://video.google.com/videoplay?docid=-9050474362583451279 explains the whole thing well in greater detail than I can here. But be forewarned, it's about 20 minutes long, but worth it, you never look at a dollar or a bank or a banker in the same way again.
And not to burst anyones bubble but things aren't looking like they're going to be getting any better anytime soon, in fact I'm certain it's going to get a lot worse. Personally I'd sink all my money into basic food commodities to weather this one out. Overseas ain't going to do you much good, because most of the countries in this world have the same system, and many are into it worse than we are.
