But there's a larger, more philosophical question here. If we could just depend on everyone to do what was prudent and sensible at all times, why would we need any laws at all? People act against their own and society's interest all the time. You couldn't ask for a better demonstration of this than the frenzy of chicanery that suffused every level of the residential housing market, from subprime loan to synthetic CDO. Ideally, we'd rather avoid scenarios in which the financial system collapses, costing trillions of dollars to resuscitate and resulting in the loss of millions of jobs. If that means protecting consumers from their own "stupid" decisions -- and, much more important, preventing financial institutions from taking advantage of those consumers -- then so be it. That's a good deal!
-Andrew Leonard, staff writer at Salon