Do not forget the mother of all paternalism!

Sir Martin Wolf in “Questions and answers on a sadly predictable debt crisis”, September 5, though he would seem to be qualifying as “paternalistic . . . the abolition . . . of devices that encourage ordinary people to borrow more than they could afford” he does not even get around to mention that mother of all regulatory paternalisms present when investors are forced, stimulated or induced to follow what the credit rating agencies say. A predictable crisis? Yes, just follow the lead of the credit agencies’ exaggerated ratings. A traditional crisis? No way, this is the first ever regulator induced crisis I have seen. Wolf acknowledges “contagion” as a cause; the question that remains though is why he does not want to name the virus bearer, namely the credit rating agencies that with their prime ratings catapulted worse than subprime local mortgages into a global crisis.