Thanks to Baseline Scenerio here is a very good summary of the causes of the financial crisis by the "La Follette Policy Report" from the University of Wilsconsin Madison. Last year I gave a number of speeches on this topic and it is good to see our lists match up. Interest rates that were kept to long for too long was a primary culprit, as was US overconsumption. These factors are related to what they call the ""capital flow cycle" in which foreign capital floods a country, stimulates as economic boom, encourages financial leverage and risk taking, and eventually culminates in a crash." Of course we are now in the process of trying to reverse much of this, though large US budget deficits will be pulling in excess foreign capital for some time to come. Meanwhile US consumption can no longer be the driver of global growth and "who will take up this role remains the next big question."