Another Economic Crash with Michael Lewis

The financial system remains inherently fragile due to misaligned incentives that reward short-term risk-taking while shielding decision-makers from long-term consequences. Author Michael Lewis explains that the 2008 financial crisis was driven by predatory lending and the systemic obfuscation of risk, where subprime mortgages were packaged into opaque bonds and sold globally. While post-2008 regulations forced traditional banks to hold more capital, financial risk has migrated to the private equity sector, which operates with minimal oversight and potential "too big to fail" implications. The current erosion of trust in foundational institutions—including the Federal Reserve, government, and media—creates a dangerous environment for managing future economic shocks. Without a credible, trusted entity to backstop the system, the mechanisms used to resolve previous crises may prove ineffective, leaving the economy vulnerable to unpredictable volatility.