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I'm Not A Member of this Religion

Here's a letter that I sent yesterday to the Wall Street Journal:

Paul Singer's case for more government regulation of financial markets
has at least two flaws ("Free-Marketeers Should Welcome Some
," April 3).

First, Mr. Singer ignores the possibility
that errors made in the private sector – such as balance sheets
leveraged too highly – were artifacts, not of too little government
intervention, but of too much.  Double taxation of profits combined
with deductibility of interest on debt; implicit government backing of
Fannie and Freddie; and (most significantly) the Fed's monopoly control
over the money supply, are just some government policies that might
have promoted the great bulk of the private-sector errors that Mr.
Singer laments.

Second, even if today's problems are at root the
fault of the market, Mr. Singer writes as if he's proposing new
regulations to an apolitical and unbiased agency, one immune to
interest-group pressures and to the weaknesses in human judgment that
Mr. Singer himself believes contributed to the market's implosion.  I
dare say that no error in judgment is so dangerous as the one that
leads Mr. Singer and others to regard government as being something
akin to a god-like institution.

Donald J. Boudreaux