Stand Up McCain!

At the 2008 GOP Convention, you eloquently challenged all of us to stand up:

"Fight for what’s right for our country.
Fight for the ideals and character of a free people.
Fight for our children’s future.
...stand up, stand up and fight. Nothing is inevitable here. We’re Americans, and we never give up. We never quit. We never hide from history. We make history."

Now, I'm asking you to stand up for freedom and against the Paulson Plan.

I listened to the speeches on the House floor in support of and against the Paulson plan.  It is clear that more than just $700 billion of taxpayer money is at stake.  One after another, Democrats rose to speak about the failure of the free markets, about the failure of the Bush-McCain ideology.  What ideology are they talking about?  Capitalism, free markets and freedom from government abuses of power.

Free Markets are on trial and they're losing badly.

You and Sarah need to stand up for free markets and set the record straight.  This is not a failure of free markets - quite the contrary , it's a failure of government intervention into free markets.  It is a failure of the Clinton Administration's efforts, in 1993,  to force banks to lend money to people they would not have otherwise loaned money to.  Sub-prime loans increase five-fold under Clinton from $200 billion to over $1 trillion and that "toxic paper" has finally come home to roost.

Priority One - call for Dodd & Frank to resign immediately.

America is against this bill because it does not stop the underlying problem, government-sponsored sub-prime loans, nor does it hold accountable Members of Congress that rejected reform of sub-prime loans, Democrat leaders in Congress.  In fact, it puts the fox in charge of the hen house.

Here’s a four-step bill America will vote for:

1. Resignations of Chris Dodd and Barney Frank – Democratic leaders of the Senate and House Banking Committees
2. 5 year phase-out of government-sponsored sub-prime loans - all CRA, Fannie Mae & Freddie Mac loans.
3. Suspend the Mark-to-Market rule – this will repair bank balance sheets overnight.
4. 5 year suspension of cap gains tax – this will flood US financial markets with new capital.

These four steps can be done quickly and will help restore confidence in our government and our markets.

In addition, they could suspend the corp income tax, to attract even more foreign investment and create millions of new jobs.  Also, you could submit a bill for term limits for Congress - Senators to two terms (12 years) and Representatives to four terms (8 years).  This will help address the long-term problem of corrupt leadership, but these ideas may be too controversial to pass quickly.

Bush's effort in 2005 to reform the GSE might have helped us avoid this mess - Obama, Dodd and Frank, in fact, all Democrats opposed reform, and all Republicans were for it.  In any event, it is completely unacceptable that the same Democratic leaders that injected toxic sub-prime loans (Dodd, Frank, Waters) into our financial markets can oversee any new scheme.   We need a bill that makes Democrats nervous, not Republicans.

Senator McCain - stand up and lead the effort for a good bill Americans will support - Congress will follow.

Thanks...Matt

More Freedom Not Less

This seems like one of those times when one needs to reflect on core principles.  There's no playbook for how to handle the financial crisis we're in.  McCain's right that the fundamentals of the economy are strong (American innovation, productivity, knowledge, skills and resources), but I've never seen this much fear and panic in the financial markets. 

My first career was as a stock broker during the 80s and early 90s so I've been a "market-watcher" for thirty years and I would have never guessed Lehman Brothers would go bankrupt.  Lehman has survived the Civil War, the Great Depression, two World Wars but couldn't survive the recent credit crunch.  Even seasoned veterans are shaking their heads.

The first step in solving any problem is to face it squarely and honestly take stock of what went wrong.  So, what went wrong?  I believe the current problem has to do with what writer & Objectivist philosopher Ayn Rand called the "mixed economy":

"The basic social principle of Objectivist ethics is that no man has the right to seek values from others by means of physical force...The only social system that bars physical force from human relationships is laissez-faire capitalism. 

Men must deal with one another as traders, giving value for value, by free mutual consent to mutual benefit. 

Capitalism is a system based on the recognition of individual rights, including property rights, in which the only function of government is to protect individual rights, i.e. to protect men from those who initiate the use of physical force."  Thus Objectivism rejects any form of collectivism, such as fascism or socialism. 

It also rejects the.."mixed economy" notion that the government should regulate the economy and redistribute wealth." 

So, contrary to the populist calls for more regulation, more government involvement, is it possible there was too much?? 

Is it possible that Fannie and Freddie are textbook evidence of why a "mixed economy" is just as bad as collective forms of government?  Maybe pushing banks to loan to people that couldn't afford a home, or verify their income, was too much regulation.

Perhaps the way forward is more freedom not less. 

Let bankers decide who to loan to.  Let oil companies drill where the oil is.  Let schools set aside time for prayer or meditation.  Let doctors practice medicine without fear of a frivolous lawsuit.  Let minorities succeed or fail because of the content of their character not the color of their skin.  Let people have health insurance and retirement accounts independent of their jobs or the government.  Let a state put a child rapist to death if they want.  Let people defend their homes with a gun if they want.  Let parents choose the best school for their children.

More freedom, not less.