Thank You, House Republicans [Mark R. Levin]

Tuesday, September 30, 2008

Thank You, House Republicans [Mark R. Levin]

I have read the posts here and elsewhere. Sometimes these things are made to look more complicated than they really are. From an economic perspective, if the problem is liquidity and credit, there simply is no need for the federal government to assume massive amounts of debt on its book by assuming loans in anticipation that their holders or borrowers will default. This seems to me like a brand new expanse of government power that is not justified (if it ever is) by the arguments made on its behalf. The government controls monetary policy through supply and interest rates, among other things. It can further ease money supply and credit, thereby increasing the flow of capital. The government controls tax policy. It can increase liquidity and the flow of new money into the economy both from within the country and from foreign sources by eliminating the corporate income tax and the capital gains tax even on a mid-term basis. No matter what is done, some financial institutions will fail, as they did in the 1981-82 recession and have since. And the Fed and Treasury and other instrumentalities of government will have to determine, on a case-by-case basis, whether to intervene and how to intervene. They will also have to determine whether other policies require modifying, such as the McCain proposal today, in which he suggests increasing federal insurance for individual depositors from $100,000 to $250,000. Other smart suggestions include modifying the mark-to-market rule requiring financial institutions to downgrade the valuation of assets. If the goal is to prevent panic in the economy by investors and depositors, then increase credit, liquidity, and the flow of capital, and deal with problem institutions that are significant enough in size that their demise could resonate to the wider economy. But the Soviet-style, top-down five year plan a la Paulson's proposal, and to a significant extent the proposal that was voted down yesterday, could easily do more damage to both the economy and our governmental structure. So, in this respect, I must depart from NRO's editorial.

Also, count me among those few here who want to thank the House Republicans for taking a bold stand against what had been a stampede on a scale I have never before witnessed on matters of huge consequence. Conservatism is more than a quaint belief-system to be embraced and debated over donuts at Starbucks. It is more than a list of talking points. It is the foundation of the civil society. The liberal uses crises, real or manufactured, to expand the power of government at the expense of the individual and private property. He has spent, in earnest, 70 years evading the Constitution's limits on governmental power. If conservatives don't stand up to this, who will? If they don't offer serious alternatives that address the current circumstances AND defend the founding principles, who will? The House Republicans have done both. And I, for one, thank them.

Incidentally, if you want to buy a home or car today you can. And if your credit is decent, you can get loans at a good rate. Last week we were told that if a deal was not struck by last Friday, our economy would collapse. It has not. That is not to say the evidence of economic troubles or worse should be ignored. It is to say that now is a time for reasoned decisions based on tried and true principles, not for abandoning them. I notice that the socialist, who, for the last 30 years, has insisted that private institutions make risky loans based on non-economic factors, still has not abandoned his policies. Socialism does not work. We shouldn't support more of it.


09/30 11:07 AM

Fannie Mae and Freddie Mac

Attack! Our politicians at work! Time for the good old practice of Tar and Feathering !

More on the Banking Disaster

Here's more on the roles in oversight of Freddie and Fannie.

The brewing of the financial collapse from the housing bubble and burst

I hope this doesn't offend as it is partisan, but contains a lot of facts that are pertinent. Where would you disagree with these issues?

Moral Response to Financial Crisis from US Bishops

WASHINGTON-Bishop William Murphy of Rockville Centre, New York, chairman of the United States Conference of Catholic Bishops' Committee on Domestic Justice and Human Development, urged the Bush Administration and Congress, September 26, to consider the moral aspects of the current financial crisis.

He stressed responsibility, accountability, awareness of advantages and limitations of the market, solidarity, subsidiarity and the common good, in the search for just and effective responses to the economic turmoil, while considering its human impact and ethical dimensions.

The text of the letter follows.

September 26, 2008

Dear Secretary Paulson, Majority Leader Reid, Minority Leader McConnell, Speaker Pelosi and Minority Leader Boehner:

The economic crisis facing our nation is both terribly disturbing and enormously complicated. I write to offer the prayers of the U.S. Catholic Bishops and express the concerns of our Conference as you face difficult choices on how to limit the damage and move forward with prudence and justice. As pastors and teachers, my brother bishops and I do not bring technical expertise to these complicated matters. However, we believe our faith and moral principles can help guide the search for just and effective responses to the economic turmoil threatening our people.

• Human and Moral Dimensions: This crisis involves far more than just economic or technical matters, but has enormous human impact and clear ethical dimensions which should be at the center of debate and decisions on how to move forward. Families are losing their homes. Retirement savings are at risk. People are losing jobs and benefits. Economic arrangements, structures and remedies should have as a fundamental purpose safeguarding human life and dignity. The scandalous search for excessive economic rewards even to the point of dangerous speculation that exacerbates the pain and losses of the more vulnerable are egregious examples of an economic ethic that places economic gain above all other values. This ignores the impact of economic decisions on the lives of real people as well as the ethical dimension of the choices we make and the moral responsibility we have for their effect on people.

• Responsibility and Accountability: Clearly, effective measures are required which address and alter the behaviors, practices and misjudgments that led to this crisis. Sadly, greed, speculation, exploitation of vulnerable people and dishonest practices helped to bring about this serious situation. Many blameless and vulnerable people have been and will be harmed. Those who directly contributed to this crisis or profited from it should not be rewarded or escape accountability for the harm they have done. Any response of government ought to seek greater responsibility, accountability and transparency in both economic and public life.

• Advantages and Limitations of the Market: Pope John Paul II pointed out that “the free market is the most efficient instrument for utilizing resources and effectively responding to needs…But there are many human needs which find no place on the market. It is a strict duty of justice and truth not to allow fundamental human needs to remain unsatisfied.” Both public and private institutions have failed in responding to fundamental human needs. A new sense of responsibility on the part of all should include a renewal of instruments of monitoring and correction within economic institutions and the financial industry as well as effective public regulation and protection to the extent this may be clearly necessary.

• Solidarity and the Common Good: The principle of solidarity reminds us that we are in this together and warns us that concern for narrow interests alone can make things worse. The principle of solidarity commits us to the pursuit of the common good, not the search for partisan gain or economic advantage. Protection of the vulnerable – workers, business owners, homeowners, renters, and stockholders – must be included in the commitment to protect economic institutions. As Church leaders we ask that you give proper priority to the poor and the most vulnerable.

• Subsidiarity: Subsidiarity places a responsibility on the private actors and institutions to accept their own obligations. If they do not do so, then the larger entities, including the government, will have to step in to do what private institutions will have failed to do.

This is a challenging time for our nation. Everyone who carries responsibility should exercise it according to their respective roles and with a great sensitivity to reforming practices and setting forth new guidelines that will serve all people, all institutions of the economy and the common good of the people as a nation. This includes not just the leaders of the economic life of our country. It means the political leaders and all those whose own expertise can contribute to a resolution of the current situation.

Our Catholic tradition calls for a “society of work, enterprise and participation” which “is not directed against the market, but demands that the market be appropriately controlled by the forces of society and by the state to assure that the basic needs of the whole society are satisfied” (Centesimus Annus). These words of John Paul II should be adopted as a standard for all those who carry this responsibility for our nation, the world and the common good of all.

Sincerely,

Most Reverend William F. Murphy
Bishop of Rockville Centre
Chairman, Committee on Domestic Justice and
Human Development

There's more trouble than the Bailout fiasco

I'm with Ron Paul on this one.

Roubini Call Bailout a Disgrace

Roubini has been pretty direct about this all along. We'll see if he's just a pessimest or if he's more honest about the trouble than anyone else.