They were the party that touted the need to deregulate and free the financial system;
The critical "deregulation" happened under Clinton and was soundly endorsed by Democrats.
they were the ones who staffed the SEC with toadies tasked to avoid inhibiting the financial markets with any sort of enforcement;
What SEC enforcement do you imagine would have prevented risky investments in subprime mortgages that Democrats were insisting FNMA and Freddie Mac continue to push onto the market so that their high-risk, low-income constituents could buy homes they couldn't afford? Bush tried to rein them in, but Fank and Dodd and other Dems called any attempt to stop the subprime racism and discrimination, and blocked it. This is all public record.
they were the ones who had no notion of developing the economy other than some sort of ponzi scheme of infinitely rising real estate values.
What do you imagine "developing the economy" entails? The GOP pushed for free trade, lower taxes, small business incentives, and education reform. The Dems pushed a social justice agenda that poisons the economy for the benefit of the unproductive.
But in this case consumers aren't spending, businesses are going into survival mode, so the spender of last resort, the government, has to step up and spend, spend, spend.
If that approach worked, Cuba and North Korea would be socialist paradises.
The government is very bad at spending money, mostly because spending other people's money for other people never works well. Giving government control of more of the economy just makes the economy worse.
Recessions happen. They're a difficult but normal and necessary part of the business cycle. But overall, things continue to improve -- thanks to Friedman's economic theories of free markets, today's living standards are so high that the inflation-adjusted poverty line today is about where the average income was in the 1950s.