We expect the government to keep dangerous products off the market – toys, prescription drugs, food. But dangerous financial products? As the current mortgage subprime meltdown painfully shows, dangerous financial products hurt everyone, including consumers, investors, and the markets.

Those who live in neighborhoods with high foreclosures rates are facing loss of home value and a reduced property tax base. Families with a foreclosed home on their block have to worry about vandalism, lack of maintenance, and other spillover problems. Everyone who uses credit in the U.S. economy, both consumers and businesses, will face higher credit costs for some time due to the confidence crisis. We will all feel the recession, partly attributable to this credit contraction.

This meltdown reminds us of a key role of government in markets – to keep dangerous products out of the marketplace. We should start including in our definition of a “dange”’ those financial products which are so complex that consumers can’t tell what they are getting into, and those where the terms change substantially after the contract is signed. There are too many of these products in the consumer financial services market today.

We should be demanding that government oversight have a goal of safe financial products for all – customers included. If this approach had been in place for the last decade, we might not be seeing the falling stock markets, devastated home values and distressed neighborhoods that we are witnessing today.