Ask yourselves: is it possible for mortgage originators, ratings agencies, underwriters, insurers and supervising agencies NOT to have known that the system of housing finance had become infested with fraud? Every statistical indicator of fraudulent practice – growth and profitability – suggests otherwise. Every examination of the record so far suggests otherwise. The very language in use: "liars' loans," "ninja loans," "neutron loans," and "toxic waste," tells you that people knew. I have also heard the expression, "IBG,YBG;" the meaning of that bit of code was: "I'll be gone, you'll be gone."The basic problem with his conclusion, "Either the legal system must do its work. Or the market system cannot be restored." is patently false. The ruling class has always functioned in this fashion until the system breaks down. This is followed by a lot of hand-wringing, blame laying, Mea Culpas, etc, and then the process starts all over again.
He perpetuates the myth that the US has a body of laws that are based on a democratic system. The reality is that the capitalist elites essentially make their own laws--obviously to serve their interests. What we have, that is, what they have designed for us, is an elaborate fake democracy behind which they hide their crimes. This will continue as long as the system continues.
So his Mea Culpa for the economist's profession rings false. The reality is that economists under this system serve the ruling capitalist class and their interests. Their careers depend on it.