The myth about what was to blame for the financial crisis is no longer just the province of the uninformed and conspiracy theorists, and that's bad news for us.

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The Great Depression imprinted itself on decades of American behavior and policy. It took until the 1950s for the Dow to regain its 1929 peak, and until the 1980s for most Americans to trust stocks as investments. People who grew up in the Depression tended to be frugal. The Glass-Steagall Act and Securities and Exchange Commission kept Wall Street and banking honest. The Republican Party, blamed for the catastrophe, was in the wilderness for a generation.

Now our national attention span has severely compressed. We live in a “post-fact age.” No wonder the financial Panic of 2008 and resulting Great Recession didn’t have a similar effect on the nation. Never was the quote attributed to George Santayana more appropriate: “Those who cannot remember the past are condemned to repeat it.” Particularly with deregulation-happy Republicans holding all power in the nation’s capital.

University of Oregon economics professor Mark Thoma does a nice job of swatting down a persistent myth in a new CBS MarketWatch column. That’s the disinformation that the crash was caused by minorities getting subprime loans, something forced on institutions by the Clinton administration’s anti-redlining Community Reinvestment Act (CRA) requirements. People email me this nonsense all the time. Nor were Fannie Mae and Freddie Mac to blame — they were losing market share to the loose standards of private institutions.

Thoma writes:

“But when it comes to the financial crisis, government wasn’t the problem. It was lack of government, specifically the failure to impose the necessary regulatory structure on the shadow banking system. I can’t put the entire blame on Republicans for the failure to regulate the financial system because Democrats also supported reduced regulation based on the idea the markets, especially ones with so much at stake, are self-regulating.”

Exactly. Let’s be clear: CRA was around for a long time. Washington Mutual signed its consent decree on redlining with the feds in 1978 and was in compliance. It continued on for decades as a sound thrift.

Bill Clinton signed the repeal of Glass-Steagall in 1999, pushed by congressional Republicans. This was followed by industry consolidation (too big to fail), taxpayer-backed commercial banks getting into ever-riskier investment banking hustles, slack regulation and the Bush administration and Alan Greenspan believing the market would police itself.

In lending, the big problem was prime, not subprime, as studies have shown. In 2007 and early 2008, Countrywide and other originators were doing “stated income, no-doc” jumbo loans from $400,000 to $2.5 million. They were bought by the likes of Goldman Sachs and Lehman, who securitized and sold them. GS and Morgan Stanley were pushing for these profitable products even as, in their role as market makers, they were hedging, betting on a housing crash as the lemmings ran off the cliff.

WaMu was done in by Wall Street’s insatiable appetite for mortgages to securitize, Kerry Killinger’s reckless leadership and finally the perhaps-orchestrated bank run that put WaMu into the hands of JPMorgan Chase.

All this is what caused the Panic of 2008.

My column isn’t an exercise in correcting fake history. Donald Trump’s economic advisers Stephen Moore and Larry Kudlow, the latter a famous Bear Stearns partier and CNBC host, apparently believe the “minorities caused the crisis” lie. They are in favor of new deregulation — which is really code for letting the banksters write the regulations to favor their rackets. That’s very bad news for taxpayers and the economy.

Today’s Econ Haiku:

The Don is right here

Big pharma should be bidding

Lobbyists are ill