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Unleashing and Feeding the Predators

Rick Belzer has this great letter in today’s Wall Street Journal:

Predators may have “roamed the financial landscape,” but it was government that set them loose. It was government-sponsored enterprises that packaged these loans into securities for sale. It was government-sanctioned ratings companies that certified them as triple-A so that responsible investors would buy them. Prof. Blinder seems to have no recollection of these horrible policy decisions. Interestingly, none of the “reforms” in the House financial regulation bill he touts would address any of these problems.

This bill follows the time-honored congressional practice of shifting blame to others, for Congress is never at fault when its foolish policies go haywire. It’s always the fault of those who respond rationally to the stupid incentives Congress sets in motion.

Richard B. Belzer

Alexandria, Va.

Rick’s letter contrasts nicely with this letter in today’s New York Times.