Voice in the Wilderness

The most important word in the phrase 'free markets' is not the word 'markets'

President George W. Bush from Texas seems content to simply throw money at the financial crisis. Thankfully, other Texans are illuminating a different path.

Texas Public Policy Foundation board member Jeff Sandefer recently penned a short missive on the Fed bailout and how we should proceed from here.

Money quotes:

Many people have played into the hands of big-government apologists by arguing that free markets are "better" because "they work," rather than defending freedom as a fundamental, God-given right for everyone.

A little reported, and even less understood, facet of the current crisis is that freedom is again in the cross hairs of big government apparatchiks. With Federal mandarins pulling the levers of home mortgage and finance, they will be in better position to determine economic outcomes....according to their politically correct notions of "fairness".

I was fortunate to be with Margaret Thatcher once in England when she reminded a group of Americans fretting about a temporary dip in the stock market: "The most important word in the phrase 'free markets' is not the word 'markets.' You cannot justify your freedom based on today's Dow Jones Industrial Average." Her words ring true, as Bush appointees scramble to stoke the engine of our economy by tossing in ever-larger quantities of our tax dollars and freedom.

We need a Thatcher to step up and compellingly proclaim the truth described above, as well as outline easy to understand principles for how to move into the storm and through the storm.

Fortuitously, another Texan, the Twittering Rep. John Culberson, is making a run at neo-Thatcherism with his statement on the principles that a rescue package should include:

I will not vote to bankrupt future generations to protect Wall Street investment banks from their own mistakes. The best solution to this crisis is to

• Suspend mark-to-market accounting rules
• Establish a mandatory insurance/guarantee program to cover the banks' losses at no expense to taxpayers
• Cut the capital gains rate to zero
• Cut taxes for offshore dollars repatriated back into the U. S.
• Cut corporate tax rates dramatically to encourage investment and lending

Changing the mark to market accounting rule alone will allow banks to keep non-performing assets on their books until they recover their value, and solve a huge part of the problem.

Finally, personal finance radio show host Dave Ramsey, who's from Tennessee but sounds like he could be from Texas, created a three step action plan reflecting the principles above that all of us can follow:

1. Pray for our leaders: If there's ever a time when the nation's leaders need the wisdom of Solomon, that time is now.
2. Send them the The Common Sense Fix to your Senators and representatives . The Common Sense Fix involves creating an investment insurance agency, temporarily suspend mark-to-market rules on subprime loans, and totally remove the capital gains tax to spur investment and liquidity.
3. Tell others about it. If you're pressed for time, send a link to this blog post.

Labels: Bailout