I'm actually usually pretty on guard over the fact that most of my information is derived from macro-economists. I am surely a layman, but I follow the Wall Street Journal, NPR and The Economist religiously. Ten of the last thirteen books I have read have been about the state and fate of the economy. I have recommendations, if you would like some. There are questions about what would have happened under other circumstances, but the mechanics of the economy crashed due to some very specific mechanisms. Credit default swaps, as abstract as they may seem, are actually pretty easy to explain. Derivatives, which are actually pretty convoluted, are demonstrably dangerous. The competing theory, that of what republicans call (the forcing of banks, by the government, to make loans to people who couldn't pay them" is verifiably mistated. Sure, we can speculate as to what regulations ought to have been in place, but the fact that the unregulated economy has been our downfall is pretty much a lock. If you want to debate details, I'm all for it. I take it you have studied economics?
I have a BS in economics.
I addressed the points you made in this post with:
"There is probably some truth to the idea that certain regulations will increase stability. In particular, limits on how much leverage banks of various types can use is likely to help. BUT such regulation might only be necessary when there is a lot of credit expansion because very easy credit makes borrowing seem a lot more attractive than proper interest rates do."
In my last post. Basically I think it is true that certain regulations could have stopped this but I think tighter credit may have simply made this unnecessary because tighter credit makes it seem a lot less appealing to expand your debt. And all of those fancy mechanisms like credit default swaps that contributed to the instability of the financial market boil down to expanding debt.
The financial market is not the whole economy either. No matter how confident you are about certain things contributing to it's collapse there are still other things going on in the economy. In particular, taking a trillion dollars and hundreds of thousands of men in prime working age out of the economy is terrible for productivity (I'm talking about the war of course).
Also, back in the 70s and 80s we had some minor collapses of financial markets while regulations from the depression area were a bit tighter. This is why I think the bigger relationship that recessions have with one another is the credit expansion.
In the modern world this is done by central banks but in the past this kind of thing also happened when a lot of new gold was discovered or when governments did something to inflate the currency.
It is easy to find a long, LOOOOOONNNNGGG list of examples of huge booms followed by huge busts right after credit expansion in an economy. Meanwhile it is much harder to find such a rich history of regulations affecting such things.
Once again, I'm not saying that the deregulation was not a factor, just that I think it is a much weaker one. Even when regulations are tighter there are always plenty of examples of companies finding interesting ways around said regulations. In particular, credit default swaps were conceived just to get around an already existing regulation on how much banks could loan.
Basically, what I'm getting at is that the economy has always had unstable mechanics that are tempting to just outlaw but before such regulation and before even central banks these were often kept in check with market determined interest rates. Sure there was still a boom and a bust cycle, but busts were generally short unless the government did something big such as fighting a huge war which is always bad in any system.