Whose fault was it?

Paul Krugman and Robin Wells writing in the New York Review of Books (HT: Brad DeLong) criticize Raghuram Rajan for believing that government policy bears a lot of responsibility for the housing crisis:

In the world according to Rajan, a professor of finance at the University of Chicago business school, the roots of the financial crisis lie in rising income inequality in the United States, and the political reaction to that inequality: lawmakers, wanting to curry favor with voters and...