Is Deregulation the Problem?

A recent New York Times article about Phil Gramm paints one congressman's efforts to deregulate (or resist regulation of) financial markets as a prime cause of our current economic problems. Here is the key passage:

On Capitol Hill, Mr. Gramm became the most effective proponent of deregulation in a generation, by dint of his expertise (a Ph.D in economics), free-market ideology, perch on the Senate banking committee and force of personality (a writer in Texas once called him "a snapping turtle"). And in one remarkable stretch from 1999 to 2001, he pushed laws and promoted policies that he says unshackled businesses from needless restraints but his critics charge significantly contributed to the financial crisis that has rattled the nation.

Although the author does a pretty good job trying to come up with smoking guns that point to Gramm and deregulation as the problem, this narrative seems a little too simple. I suspect that we could only properly regulate our way out of this crisis only in hindsight, and as the conversation on this blog has indicated, the factors contributing to the crisis are difficult to distill down to this or that government action.

It is fascinating, however, to watch the economic narrative in the media change in response to this crisis. Will the narrative about regulation change within the economics profession as well?