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Government has its uses

Reader Input
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Grant Shaw needs to go back to Econ 1A (Reader Input, Sept. 26.) It is not government regulations that lead to economic meltdowns. The Community Reinvestment Act that Shaw cites was passed in 1977. It is simply laughable to blame it for the financial crisis of 2007. There is nothing whatever in that act that “compelled” banks to make loans without verifying the information on the application. There is nothing about bundling marginal loans into “mortgage backed securities” and then selling them to unsuspecting investors throughout the world. And there is absolutely nothing which says the bankers could assure the investment houses that these investments were secured when they were only backed by worthless “credit default slips.” (Government-regulated insurance plans would never have permitted this.) Sorry, Grant, the CRA and “the liberal Democrats” were not responsible for this disaster. It was the bankers and investment brokers who made untold millions on the up-front sale of these securities and then were “safe at home” when their house of cards collapsed. These shady practices — which should have been regulated — were made possible by the Reagan philosophy of “get government off our backs.” THAD WESTPHALIA, Sacramento