Eight or nine years ago, I attended a seminar given by a property flipper. People made some good money in that business, including -- as we now know -- Elizabeth Warren. In the early 1990s Professor Warren took advantage of the real-estate market in her home state of Oklahoma, which had been crushed by the S&L debacle. In various guises, including something called the Herring Trust, she purchased and sold ("flipped") foreclosed property and loaned money (and charged interest) to her relatives, enabling them to do the same thing. Not that I have a problem with this, but then again, I don't claim to have provided the "intellectual basis" for the Occupy movement.

After the seminar, the presenter and I were talking, and he suggested that I should consider selling mortgages -- but not just the run-of-the-mill sort. He gave me a packet describing what we now know as sub-prime mortgages. I had never seen anything like it. No-doc mortgages with a low down payment? "What kind of bank," I asked him, "would be stupid enough to lend money like that? How can they expect to get paid back?"

Professor Warren likes to say that the 2008 crisis began "one lousy mortgage at a time." For this, Warren blames "a deregulated credit industry (that) squeezed families harder, hawking dangerous mortgages." Really? And why would banks loan money to people unable to pay them back? What would be their incentive? How can they make money if they don't get paid back?

It turned out that

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the banks were being stupid with other people's money. The bureaucrats at Fannie Mae and Freddie Mac put the U.S. Government stamp of approval on this garbage and packaged and sold these mortgages to investors all over the world. When the bubble burst, we all know what happened. Do you think financial reform would involve Fannie and Freddie, the institutions that created the monster? You might think so, but you would be wrong. Dodd-Frank avoids taking on the government bureaucracy. Instead it creates a new one, the Consumer Financial Protection Bureau. Unbelievably, this new bureau is within the Federal Reserve. The Fed, originally set up to manage the money supply, is deliberately isolated from governmental oversight. Congress, through such diverse figures as Ron Paul and Dennis Kucinich, has been screaming for an audit of the Fed, but to no avail. And yes, the CFPB is the "little agency" of which the well known Washington outsider, Professor Warren, is "Godmother."

Hard to believe, after all we have been through, that this could happen in 2012.

JEFFREY WALLENS

Groton