Krugman sort of agrees with Baker

The Financial Industry and Financial Crises by Krugman 

Yet the economy remains depressed, with recovery far from complete. My current modeling approach stresses the overhang of household debt as an explanation; it’s not about the financial system any more. 

By the way, way back when, when I was worrying about Japan, I quarreled with the common argument at the time that Japan’s problem was “zombie banks”, and that once the banks had been recapitalized all would be well. They were, and it wasn’t, and much the same has been true for us now. 

So Dean and I agree; maybe I shouldn’t use the term “financial crisis” at all, but it’s the terminology people know. 

Now, there is, I suppose, a hint of disagreement about what would have happened if we hadn’t bailed out the banks at all. Dean thinks we’d be in the same place; I think we would have had a second major round of damage, which we’d still be feeling. In other words, I think that something like the TARP was necessary — just not sufficient. 

Anyway, just to be clear: we may have had a banking problem in 2008-2009, but now we have a burst bubble problem, I’d say in the form of a household balance sheet problem. And a bank-centered view is indeed misleading.