Who caused the recession?

Answer 1

Lots of people, really. Over-borrowing is probably the major cause on both a personal level and a governmental level. For example, during the Bush presidency the US went into two lengthy and expensive wars while significantly cutting taxes for the wealthy, which further fueled wealth inequality and decreased income mobility for the lower classes, while significantly exacerbating the national debt because of decreased revenue. These factors indirectly decreased equal opportunity and substantially lowered improvements in infrastructure (funding for infrastructure increases employment).

The mortgage part of the crisis had other causes as well, especially lack of integrity through the entire transaction flow, not just any particular step. The flow started with mortgage company execs who allowed or encouraged their people to be rewarded for volume of mortgages regardless of the quality. Next were the actions of the sales people and their interactions with unqualified borrowers. Then the mortgage companies packaged and sold the mortgages, which the Wall Street people turned into CDO's. Then the ratings agencies blessed the CDO's with AAA ratings. AIG insured them, without legally calling it "insurance" in order to get outside regulatory authority. Meanwhile, the SEC was asleep.

It is hard to spot any integrity in the whole process.