They write,

Current reservations about securitization do not invalidate its economic rationale, arguing instead for repairing the flaws exposed by the recent crisis. Securitization alleviates credit constraints and places asset exposures with entities that are more willing to accept and are able to manage them. Thus, issuers can mitigate disparities in the availability and cost of credit in primary lending markets while conserving capital by more efficiently dispersing risks.

Basically, they argue for the approach that I call putting Humpty-Dumpty back together, wrapped in some additional regulatory tape, and sticking it (him?) back up on the wall. I say, disconnect the asset securitization markets from the feeding tube of government support, and let them die.

What is frustrating is that we cannot even have that debate. Financial “reform,” like health “reform,” is so focused on entrenching the status quo that my views are beyond the pale.