Mlada Bukovansky has the best conclusion to a blog post evah:
Actually I've now typed myself to the edge of a philosophical abyss but instead of deleting this post I'm just going to post it.
The abyss Bukovansky has approached is of her own making. She begins her post by describing her "fascination by the narratives of the financial crisis that basically cast it as a mass deception," and cites a couple of headlines indicating that some financial firms spent some effort trying to obfuscate some of their activities. She goes on to say that the postmodern financial system depends on complexity-cum-opacity in order to function, which she claims is a form of deceitfulness, and that this is "insidious". Her argument, in other words, is that the financial crisis occurred because finance is evil, and finance is evil because it's complicated. I don't think I'm exaggerating her view, since she goes on to imply that the financial system is founded on "socially constructed and accepted lies".
(Small quibble: Michael Lewis is not a sports writer who sometimes covers business, as Bukovansky claims; he's a bond salesman turned business writer who sometimes covers sports, and who rose to prominence with Liar's Poker, a book criticizing the Wall Street excesses of the 1980s.)
The point of setting things up this way is to carve out space for constructivist explanations of the crisis: how did these norms of insidious complexity develop? Why were they allowed to persist for so long? How do we distinguish between socially constructed lies and socially constructed truth? By the end of the paragraph she's standing on the edge of the abyss.
I find the argument that complexity=opacity=lies to be less than satisfying, and it's a strange one for a constructivist to make. Certainly some complex realities can also be true, yes? Bukovansky acknowledges as much when she wonders how we can distinguish social truth from lie (the abyss), but she discounts the possibility of truth entirely when talking about finance: it must be insidious because common people can't understand it. Even more bizarrely, she quotes a passage from Johnson and Kwak's book that makes the opposite assertion: the structure of finance was not a lie, they claim, because all of the principals believed it. Why she thinks this passage supports her core claim escapes me.
If I were a constructivist try to piece together a narrative of the crisis, which I'm not, I would not focus on mass deception, and I would certainly not describe a culture as "insidious" simply because it was complex. (After all, isn't one of the central claims of constructivists that all cultures are complex?) Instead, I would focus on mass delusion. As Johnson and Kwak demonstrate, and as been described in detail in dozens of other places (e.g. Sorkin's book), the financial industry and their regulators were surprised when the system melted down the way it did. Moreover, there appears to have been very few instances of outright fraud: even the recent charge against Goldman Sachs (which is yet to be proven, and seems iffy to me, but then I'm not a lawyer) refers to an isolated incident that was nowhere near large enough to have caused the crisis, or even contributed much to it. I think it's fair to say that the SEC has spent plenty of time searching from illegal acts, and nearly two years on they've found nearly nothing*. The most notable feature of the Wall Street culture was seemingly not fraud, but "irrational exuberance". The crisis itself was not caused by deceit, but by an unexpected 40% drop in home prices. That is, by an extreme tail event that had never before occurred in American history. That's not to say that culture of Wall Street didn't help fuel that bubble, but it's not at all clear that they did so in bad faith. If they did, then why were the banks caught holding long positions on bad bets?
Or, if I were a constructivist, I might focus on the mass demonization and scapegoating that followed the crisis. Bankers weren't the only ones who bought into the "Wall Street is good" mentality, and bankers weren't the only ones who sought to profit from the housing bubble, yet they have received the full brunt of public ire despite the fact that little outright fraud has been uncovered. Wall Street was only one player in an event that the entire country bought into. Moreover, the bailouts of Wall Street will cost the public much less than the bailouts of Main Street (e.g. auto companies) and government firms (Fannie and Freddie). So why has all the public scorn been reserved for Wall Street? Does classist scapegoating classify as insidious?
Perhaps the most interesting theoretical explanations for the crisis have come from the Keynes-Minsky-Kindleberger tradition that emphasizes mass psychology and "animal spirits". If I were a constructivist seeking to construct a narrative of the crisis I'd focus on the role that ignorance played, rather than deceit.
*Which is not to say nothing is there. I'm sure some misrepresentation went on, and I'm sure there were plenty of miscellaneous shenanigans that may have crossed the line of legal propriety. But so far those instances appear to have been few, far between, and not nearly large enough to have caused the crisis.