The Mortgage Meltdown as Normal Accidental Wrongdoing

We analyze the mortgage meltdown as a “normal accident” (Perrow, 1984). We begin by briefly outlining normal accident theory; both Perrow's original version and Mezias' (1994) subsequent extension. We then use normal accident theory to analyze the mortgage meltdown and draw a few insights from our account. We then consider the relationship between normal accidents and wrongdoing; a vexing question for both normal accident theory and observers of the meltdown. We conclude by briefly contemplating the policy implications of our analysis