{"id":581996,"date":"2010-05-27T14:50:00","date_gmt":"2010-05-27T18:50:00","guid":{"rendered":"http:\/\/seattletimes.nwsource.com\/html\/northwestvoices\/2011967998_reformingwallstreet.html?syndication=rss"},"modified":"2010-05-27T14:50:00","modified_gmt":"2010-05-27T18:50:00","slug":"reforming-wall-street","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/581996","title":{"rendered":"Reforming Wall Street"},"content":{"rendered":"<p><strong>Government needs a tweak or two<\/strong><\/p>\n<p>Although not surprising, it remains appalling how Congress\u2014in its deliberations on new regulations for the financial-services industry, supposedly intended to prevent another collapse of the credit markets such as was experienced in 2008 \u2014ignore its own major role in causing that collapse. [\u201cAdopt the toughest reforms, Opinion, May 24.]<\/p>\n<p>The vast amount of subprime mortgages that underlay the collapse were the direct result of acts of Congress. Fannie Mae and Freddie Mac, both established by Congress, were not only authorized to purchase without recourse subprime mortgages issued by banks, but they were encouraged by Congress to do so.<\/p>\n<p>The Community Reinvestment Act required banks to grant mortgages to borrowers not worthy of credit. The deductibility of residential mortgage interest for income tax purposes induced homebuyer to take on mortgages they could not afford. All of these acts by Congress resulted in the huge amount of outstanding subprime mortgages and diversion of capital that could have gone into more productive use.<\/p>\n<p>Yes, those who invested in the mortgage-backed securities packaged by Fannie and Freddie were neglectful in not recognizing the poor quality of the mortgages backing the securities, but those subprime mortgages would not have existed were it not for the follies of Congress.<\/p>\n<p>It is one more example of how government intervention in markets results in ineffective allocation of resources with a resultant lowering of people\u2019s standard of living. Much more than the financial-services industry, it is government that needs to be reformed.<\/p>\n<p><em>\u2014 Donald Marsh, Bainbridge Island<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Government needs a tweak or two Although not surprising, it remains appalling how Congress\u2014in its deliberations on new regulations for the financial-services industry, supposedly intended to prevent another collapse of the credit markets such as was experienced in 2008 \u2014ignore its own major role in causing that collapse. [\u201cAdopt the toughest reforms, Opinion, May 24.] [&hellip;]<\/p>\n","protected":false},"author":2861,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-581996","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/581996","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/2861"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=581996"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/581996\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=581996"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=581996"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=581996"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}