Modern World I'm Not Pleased To Meet You, You Just Bring Me Down

I thought this was a good but scary general point by Paul Krugman (Tyler Cowen liked it too):

This is actually a very broad problem with all accounts of the crisis that try to exonerate the private sector and place the blame on the government and/or the Fed: none of the proposed evil deeds of policy makers were remotely large enough to cause problems of this magnitude unless markets vastly overreacted. That is, you have to start by assuming wildly dysfunctional financial markets before you can blame the government for the crisis; and if markets are that dysfunctional, who needs the government to create a mess?

Financial markets being wildly dysfunctional is a really big problem. The way contemporary society is organized depends for its success on the financial sector allocating resources in a reasonable way. Either you've got to make financial markets act more rationally, or you've got to decrease their role in the economy. I don't have much of a clue about how you'd go about doing either.

(Admittedly, the criticism of the modern financial system in this video is quite different from mine, but it's pretty and I really like the vocals in the last 40 seconds or so.)