How did we get here?

There's a lot of people talking about why and how the economic crisis we're in started. Which is important, because we need to know what was wrong to know how to fix things and prevent this from happening again.

So here's my storyline, in the shortest short version. Short term thinking and greed led a lot of people to make bad decisions. Fraud and more short-term thinking and greed magnified these. And lax regulation let companies get so big and leveraged that the short-term thinking and greed was able to threaten the whole economy.

I'll go into more detail later, including why executives get paid in stock options and how that screws up their incentives, how companies suborned the ratings agencies which allowed the massive fraud of packaging risky loans as "AAA" bonds, why banks were able to get so big, how this is like the S&L crisis in the 80s that turned little building and loans like Jimmy Stewart's into centers for fraud and collapse, and other similar things that can be found with a couple checks of Google and Wikipedia that cable "news" shows are too lazy to do.