Thursday, October 23, 2008

Beyond Bailouts

The National Taxpayers Union and Competitive Enterprise Institute, both strong supporters of a conservative/libertarian fiscal policy, have come up with their own alternatives to the bailout and new proposals to help fix the economy through their new site, Beyond Bailouts. Their ideas are simple: Privatize Fannie and Freddie, Prosecute Corrupt Officials, Suspend Destructive Accounting Rules, Repeal the Community Reinvestment Act, and Clean Up the Tax Code. They've got simple, straightforward reasons as to why they think each one will work and, frankly, I'm already convinced.

What's interesting for those who claim that the failed deregulation of President Bush's last 8 years led to the financial crisis is this...of the 23 major regulations passed during President Bush's years in office...15 of them increased federal regulations. In addition, the SEC budget increased by nearly $300 million while Bush was in office to enforce these new regulations.

Check out Beyond Bailouts and learn more about their alternative approaches. Very interesting and especially for those of us who believe in a limited government -- very reasonable.


The Only Sensible Man Alive said...

What I'd like to see is a list of the regulatory issues that were addressed and how the relate to some of the fundamental issues that the crisis was predicated on: the issuance of bad credit, securities based on bad debts, and the insurance of such securities to artificially boost their ratings, even though the insurance companies could never the losses that occurred.

To say that regulation increased is necessary, but it's not sufficient. We have to know what those policies covered, and how they relate to what happened. If federal regulations didn't cover, or insufficiently covered the areas of the banking sector that collapsed in, then it's not really valid to conclude that regulation isn't a proper solution, because the activities in question were not regulated, or had gaps.

I'll try and get a look at what the regulatory rules were over the weekend and make a post about it a little. It's been a while since I've taken an issue on in depth.

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