I thought the following were de-regulation i.e removing forced Federal and State regulations of the free market (and all three contributed to the financial crisis)
Community Re-investment Act- Made credit default swaps legal. This was not regulated at all and free market did not introduce a self regulatory body to oversee it.
Rigele-Neal Interstate Banking Act- Allowed banks to operate nationawide. Surely de-regulation of the financial sector?
Gramm-Leach-Bliley Act- Allowed security, insurance and bank companies to operate in all financial sectors and not just their own specific areas. I can't see how this can be described as anything but de-regulation of the financial sector.
All of the above were initiated and passed because the Senators and others in power (like from the Treasury) who advocated such acts were generally speaking from the financial sector. Massive conflict of interest if you ask me. Between serving the good of your nation and it's majority inhabitants and the good of Wall Street. Key word again here is 'externalities'. I can't see how any of the above can be blamed on Keynesian economics. I mean it's like the last 6-7 administrations kept parts of the Keynesian economics that would make them and their buddies in the financial sector wealthier but ditched all the regulatory part thanks to the work of Friedman and co. Cronyism I call it.
If you look at the growth of the US during it's Keynesian years, it was much more egalitarian (though it rocketed post war and decades after that), wages were relatively speaking better and the average American had a better quality of life. For the last 30 years though, wages have stagnated (relatively speaking) and most of the wealth generated through deregulation and monetarist economics have gone to a small yet very powerful elite. The US economy pre 2008 Financial crash was more free market then it had ever been though some would argue not enough and not a 'real' free market as I'm sure a lot of mega corporations such as the big banks must of known they were too big to let fail and hence there would always be a golden parachute waiting to rescue them in a worst case scenario.
What I find unbelievable is Obama is hiring the very people who liberalised the financial sector to put the house back in order!
I think your pulling facts out of acts that offered de-regulation, without the other aspects of the laws which sought to incentivize bad market behaviour through Keynesian economics. All of the acts which had de-regulation also included new guidelines for these larger banks to follow.
For example, the CRA did make credit default swaps legal, but its primary goal was to ban redlining.
The Community Reinvestment Act of 1977 seeks to address discrimination in loans made to individuals and businesses from low and moderate-income neighborhoods. The Act mandates that all banking institutions that receive Federal Deposit Insurance Corporation (FDIC) insurance be evaluated by Federal banking agencies to determine if the bank offers credit (in a manner consistent with safe and sound operation as per Section 802(b) and Section 804(1)) in all communities in which they are chartered to do business. The law does not list specific criteria for evaluating the performance of financial institutions. Rather, it directs that the evaluation process should accommodate the situation and context of each individual institution. Federal regulations dictate agency conduct in evaluating a bank's compliance in five performance areas, comprising twelve assessment factors. This examination culminates in a rating and a written report that becomes part of the supervisory record for that bank.
The law, however, emphasizes that an institution's CRA activities should be undertaken in a safe and sound manner, and does not require institutions to make high-risk loans that may bring losses to the institution. An institution's CRA compliance record is taken into account by the banking regulatory agencies when the institution seeks to expand through merger, acquisition or branching. The law does not mandate any other penalties for non-compliance with the CRA.
Or in other words, if you want federal loan guarentees, you must follow their low-income (e.g. risky) loan regulations. Further CRA revisions did offer some de-regulations, but many came at the cost of adding more incentives for loaning to low-income citizens. For example, Riegle-Neal act also added new TILA regulations which were immediate (whereas the allowance for mergers was fully adopted at a latter date - 1997 - while the data may suggest that the new TILA regulations had a far more immediate effect). Additionally, during the same time period, you had Executive Order 12892 which expanded the reach and abilities of HUD, which again likely contributed to the housing explosion in 1994.
That is my whole argument: We have to look at the explosion of 1994 which created the boom, which led to all the major problems such as the subprime lending crisis, which with the assistance of credit default swaps resulted in the crash. Therefore, my view is that such deregulations as you mentioned did not cause the inflation which led to the problem, although they assisted in it.
I believe that the problem is that we've enabled a hybrid Keynesian-Friedman alliance in which markets were de-regulated, but risk was socialized in order to spur consumer demand, which has created a screwed up market with fewer risks than what are needed to keep the market honest. The question then becomes an argument of which came first: the Keynesian policies or the free-market policies.
Back from the dead, I'm afraid.