Your analysis neglects one very important fact: it was the government and the quasi-governmental agencies Fannie Mae and Freddie Mac that were root causes of the financial problems. Fannie and Freddie repackaged loans into derivatives and investment firms bought them thinking that they were safe investments. After all, they were ‘backed by the government’.

We don’t have one wolf, we have two. You seem to implicitly trust the second wolf to watch over the first. My question is what watchdog is going to watch the watchdog? The government does a very bad job of looking at its own abuses. It is easy to find YouTube audio/video of Republicans (lead by the Bush administration starting in 2003) calling for greater oversight of Fannie and Freddie, and Democrats vitriolically insisting that, “Frankly, we were trying to fix something that wasn’t broken” (Maxine Waters, D-California). Here is the link to a good summary clip: http://www.youtube.com/watch?v=_MGT_cSi7Rs.

You wrote that it is “the government that saved the butts of almost every major Wall Street firm and big bank…” – do not forget that the government was also at the heart of the problem. I do not conclude with you that “the government should be calling the shots when it comes to creating a system where these firms don’t carry us to the brink again”. At most, government should have narrow and well-defined power in this area. Your editorial seems to imply giving broad and ill-defined power to the Obama administration and the government that will inevitably be abused. Please, please, please let’s not give Barnie Frank and his cronies more power.

I am certainly as disgusted as the next person at what happened in situations like Merrill-Lynch’s billions in bonuses in the face of even more billions in losses just prior to the Bank of America buyout. In my opinion, the American people, the government, Bank of America (if not complicit), and certainly B of A’s stockholders (which includes the goverment thanks to TARP) have had what should be an illegal diversion of capital perpetrated against them. Truthfully, if we do not already have laws on the books sufficient to meet this situation, I would be surprized and not pleased.

This and anything else of this ilk should be, and I hope currently is, prohibited. We must first seek redress using current law. By established legal principal, any new legislation cannot retroactively deal with past abuses. What are we going to do, let what happened go unpunished and say “Don’t you do it again, I mean it this time”? In the face of the current massive increase in government size and power, I repeat that any new legislation should be narrrowly drafted.

Jerry Phillips, CFP(r)