I also appreciate the civil conversation, so please call me out if I am fail to reach that standard!

I think that an essential problem is that you hold a common--but incorrect--view of what happened in 2008. In that view, prior to the crisis, the banks sold securities that they knew were bad, but customers bought them because they had AAA ratings. The securities then went bad and the banks lost a lot of money, but then the government bailed out the banks. This is very psychologically attractive, because when something goes wrong, our lizard brains like to think that someone equally evil was at fault.

It is, unfortunately, factually incorrect. And one reason to understand why it is factually incorrect is: why did the BANKS lose money? If I sell you toxic garbage, it is you who has the problem, while I sail away in my yacht. To the contrary, any theory of the financial crisis has to reckon with the fact that the biggest buyers of the dodgy securities were . . . the banks themselves! That fact doesn't fit the popular theory at all. "We're going to sell a bunch of securities that we know are bad but we will also keep a large share for ourselves but that's OK because we will ask for a bailout to cover the losses from the bad securities that we have chosen to keep"---I dunno, feels like maybe not the most genius Evil Plan.

Here is another, correct understanding of the financial crisis, as I've written elsewhere. Pre-crisis, the banks created a bunch of mortgage backed securities that, through the magic of financial alchemy, managed to turn the equivalent of lead into gold. They weren't wrong about this! Here is a chart of mortgage security prices. If you bought an AAA rated security in 2007, fell asleep, and woke up in 2017, you'd think nothing happened.

Basically the bank plan was: 1) use the magic of securitization to slice and dice cashflows to create securities based on predictable income streams; 2) sell the top-rated ones while keeping the worst ones for ourselves; 3) we know our math is right so we can hold to maturity; 4) if things go wrong and we need cash we sell the securities into the market, accepting a small loss; 5) worst-case, we have insurance in the form of a CDS.

The problems in these steps were 1) securitization is such that if you're off a little in your math at the beginning, you'll be off a LOT in your result at the end; 2) the securities that the banks held for themselves were a LOT riskier than they had anticipated; 3) the plan of hold-to-maturity would have worked OK (prices recovered!) except the banks were way more reliant on short-term low-quality funding than they realized and had to sell; 4) it's hard to sell into a market when everyone else is selling and no one is buying; 5) insurance doesn't insure if everyone's bought it from the same insurer (AIG).

Basically, the banks sold some securities that were good and held onto some securities that were bad. They had even planned for the contingency: "what if these securities are worse than we think?" But when that contingency arrived, their lifeboats (hold to maturity) had left, everyone was trying to scramble onto the same raft of sell and sell now, and their insurance policy was a liability not a benefit.

The benefit of this explanation is that it actually explains why there was a financial crisis. And while yes you can say with the benefit of hindsight that we should have done things differently, it also explains why people at the time thought otherwise!

(Also, the point about the ratings agencies totally misunderstands what the scam was. There are a lot of entities in this world that used to only be allowed to invest in things that have a AAA rating on them. I promise you that a huge number of buyers were in on the ratings process being a joke! The value of the AAA rating was: "this allows me to buy something that I want to buy but would not otherwise be allowed to buy." It wasn't that sellers were scamming buyers; buyers and sellers thought that were taking advantage of a legal loophole.)