The Financial Crisis Inquiry Commission report is sure to provide a powerful reinforcement to the growing lack of faith in elites and especially the financial industry. Because they will outline, in painstaking detail, how the financial meltdown of 2008 was completely avoidable – the result of policy failure at the highest levels of government and Wall Street, failures that bordered on criminal and that have never been fully adjudicated.

The commission that investigated the crisis casts a wide net of blame, faulting two administrations, the Federal Reserve and other regulators for permitting a calamitous concoction: shoddy mortgage lending, the excessive packaging and sale of loans to investors and risky bets on securities backed by the loans.

“The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done,” the panel wrote in the report’s conclusions, which were read by The New York Times. “If we accept this notion, it will happen again.”

This failure was not limited to one party or one set of elites. Everyone at the top level of the business and government food chain had a role to play in creating the conditions to crash the economy and cause untold and unnecessary suffering for hundreds of millions across the planet. If this were only the elite’s playground, if only they bore the consequences for their actions, it would be acceptable to dismiss the entire process. But in fact, that’s been the opposite of what occurred. Financial greed and mismanagement had a profound effect on the world’s poor and plunged countries across the globe into a near-depression, but just two years later, they’re back on top, strutting around Davos, thrilled and optimistic and still laden with bonus cash. Almost nothing changed for the elites who irresponsibly destroyed the global economy; almost everything changed for those without the same level of power and influence.

The 576-page FCIC report, due out tomorrow, will spare nobody:

The majority report finds fault with two Fed chairmen: Alan Greenspan, who led the central bank as the housing bubble expanded, and his successor, Ben S. Bernanke, who did not foresee the crisis but played a crucial role in the response. It criticizes Mr. Greenspan for advocating deregulation and cites a “pivotal failure to stem the flow of toxic mortgages” under his leadership as a “prime example” of negligence.

It also criticizes the Bush administration’s “inconsistent response” to the crisis — allowing Lehman Brothers to collapse in September 2008 after earlier bailing out another bank, Bear Stearns, with Fed help — as having “added to the uncertainty and panic in the financial markets.”

Like Mr. Bernanke, Mr. Bush’s Treasury secretary, Henry M. Paulson Jr., predicted in 2007 — wrongly, it turned out — that the subprime collapse would be contained, the report notes.

Democrats also come under fire. The decision in 2000 to shield the exotic financial instruments known as over-the-counter derivatives from regulation, made during the last year of President Bill Clinton’s term, is called “a key turning point in the march toward the financial crisis.”

Timothy F. Geithner, who was president of the Federal Reserve Bank of New York during the crisis and is now the Treasury secretary, was not unscathed; the report finds that the New York Fed missed signs of trouble at Citigroup and Lehman, though it did not have the main responsibility for overseeing them.

The worst part about this financial crisis is that it has not ended. On an almost daily basis, we see additional reports of foreclosure fraud, the broad cover-up of the failures in securitization that were at the heart of the crisis. Just yesterday, a Bank of America home mortgage unit was ordered to stop all foreclosures in Nevada, a non-judicial foreclosure state, that aren’t authorized by a court order. There have now been allegations of robo-signers on the notice of default, virtually the only thing that has to be done properly in these non-judicial foreclosure states. In a separate case, Countrywide (now a division of BofA) has been suit by a coterie of investors, saying that the mortgage-back securities they bought from Countrywide were completely misrepresented. This is an example of the continuing mortgage bond scandal and the repurchase wave that threatens to swamp major banks.

Despite these injustices, despite the continued rush to foreclose, to bury the evidence of fraud, we’ve yet to see any major prosecutions coming out of the crisis. The FCIC will reportedly refer a wide range of activities for criminal prosecutions, but the Justice Department or individual state Attorneys General have to act on it. The actions of Iowa Attorney General Tom Miller are instructive in this regard.

The latest step backwards by Miller is a softening in his stance and a refusal to reaffirm his earlier commitments. From Iowa CCI’s press release about its meeting yesterday with Miller:

Following their December 14th meeting with Iowa Attorney General Tom Miller, who is leading the 50-state investigation of the “foreclosure-gate” scandal, 200 members of Iowa CCI met with him again on Tuesday to continue the push for a settlement that will help millions of Americans stay in their homes. Iowa CCI is part of a coalition of community groups across the country fighting to end the foreclosure crisis.

“Tuesday’s meeting felt a lot different than the meeting in December,” said Iowa CCI Director Hugh Espey, “In our first meeting with Attorney General Miller we felt like we had a champion that was ready to go toe to toe with the big banks. We left this meeting wondering if the big banks had knocked the wind out of our state’s top law enforcer.”

“In many cases a loan modification is in everybody’s best interest – the homeowner, the investor, servicer and the national economy,” Miller had said in a statement following the December meeting. “… I know it’s worth our best efforts to save as many homes as we can.”

In Tuesday’s meeting The Attorney General was less forthcoming about the intended outcome of the settlement. He did not repeat previous commitments to aim for a settlement that would keep people in their homes, nor to press criminal charges against bank officials where evidence of fraud and criminal wrongdoing is found. The Financial Crisis Commission has recently referred several cases to the states for further criminal investigation.

The reason so many people have lost faith in elites is because they see a country operating without a rule of law, with rogue criminals still working at major banks across the country and a two-tiered system of justice depending on your power and influence. The FCIC report will provide powerful proof of this.

More from The Financial Times. But I’ll leave you with this, written by Phil Angelides, the panel’s chairman:

“The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire,” the report states. “The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand and manage evolving risks within a system essential to the well-being of the American public. Theirs was a big miss, not a stumble.” [...]

The report, which was heavily shaped by the commission’s chairman, Phil Angelides, is dotted with literary flourishes. It calls credit-rating agencies “cogs in the wheel of financial destruction.” Paraphrasing Shakespeare’s “Julius Caesar,” it states, “The fault lies not in the stars, but in us.”