And again, the main reason bankers didn’t get more punishment is because the government doesn’t want the issue looked into.

The main reason the bankers weren’t gone after even harder is to protect the bureaucrats.

Especially Greenspan. The rich tax-backed speculators did NOT want to even think about a crash, nor did the bank-captured regulators.

Scott Sumner claims that GNP growth from the 2006 peak of house prices to the 2008 bank crises proves the house price crash was not the key event. I’m certain he’s wrong, but can’t prove it. The house price crash meant some 10-30% of US economic activity was “malinvested”, with slightly to hugely negative rates of return.

Burry’s short selling of the financial products were picked up by newly risk conscious execs around 2007 as the house price increase gravy train turned into a train wreck. It took all of 2007 and half of 2008 for the self-deceived lie believers to realize how much they were about to lose and how few their options were. See 2007 bankruptcies: http://www.mondaq.com/unitedstates/x/58228/Insolvency+Bankruptcy/The+Year+In+Bankruptcy+2007+Part+1

>>Laurels for the largest public bankruptcy filing in 2007 (and the ninth-biggest public bankruptcy filing of all time) went to subprime lender New Century Financial Corp., once the second-largest provider of home loans to high-risk borrowers in the U.S., which filed for chapter 11 protection in Delaware on April 2, 2007, listing more than $26 billion in assets. New Century wrote nearly $51.6 billion in mortgages in 2006 and once employed more than 7,200 people <<

The rich executives knew it was wrong, they were deliberate, they were only deceiving themselves about how hard the market might punish them — they thought, not very much.

They should have all gone bankrupt, but with emergency Fed semi-nationalization power to a) wipe out all equity, b) fire all execs/ offering new "median wage only" jobs to the non-execs, c) force debt to new equity conversions so as to keep the firms operating in a limping along way — and a lot of the most lucrative business goes to lower tier banks that had been less greedy/ risk accepting.

Meltdown at the top of finance, with a loosening of money at the Fed (both lower rates AND more money available for QE or helicopter drops or tax refunds or tax loans), would not have been worse for industry/ Main street than what did happen.

The bailouts kept the rich rich despite their foolish support for dishonesty.

The book is great (haven't seen the movie), and Dr. Michael Burry has a good UCLA speech a few years ago:
http://www.zerohedge.com/news/dr-michael-big-short-burrys-brutal-hangover-inevitable-state-world-ucla-commencement-speech