Hey Stupid Media Folks!
It’s not that we don’t think the crisis is real, or we need a better explanation – what we need is accountability. It’s like handing your car keys to your teenager right after he asks you to pay his $200 speeding ticket – responsible parents keep the keys and make the kid pay the ticket.
We don’t trust folks who caused the problem to fix the problem.
Here’s a plan America will support:
- Dodd, Frank & Paulson Must Resign – These three Democrats have betrayed the public’s trust, with historic results, and need to go now. Their resignations will say loud and clear: corruption in Washington caused the problem, not free markets.
- 5 year phase-out of gov’t-sponsored sub-prime loans -the “toxic paper” that crippled our credit markets.
- Suspend the mark-to-market rule – this will repair distressed bank balance sheets overnight (see below).
- 5 year suspension of cap gains tax – this will flood US financial markets with new capital and not penalize folks who invest in America when we need it most.
- Life the Ban on Offshore Drilling - this single act will lower structural costs for families and businesses across the country and around the world and grow the economy.
These five steps can be done quickly and will help restore confidence in our government and our markets.
As Frank Luntz said on Fox last night, during natural disasters, voters want action, during economic crisis, voters want accountability. If this is “the worst crisis since the Great Depression”, why hasn’t anyone paid a price for causing it? Yes, there was greed on Wall Street to market these exotic products based on “toxic paper”, but there’s been greed on Wall Street for three hundred years.
The reason we’re in a crisis now is because Democrats in Congress, under Bill Clinton’s leadership, and with Barack Obama’s help at ACORN in Chicago, quintupled sub-prime lending, from $200 billion to over $1 trillion during the 1990s. Democrats (Dodd, Frank) created the toxic paper in the first place and (Obama, Biden) fiercely protected it in 2005 when Bush and McCain tried to enact reforms that would have prevented this crisis.
Here’s McCain’s prescient warning on May 25, 2006:
If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
Ideally, it would be great if McCain rallied Americans to support a plan like this. Congress will follow us – not the other way around.
If Democrats start to resist lifting the ban on drilling, remove it at their request from the overall rescue plan and pass the other four points. Then we can debate Drill Here, Drill Now, Pay Less with Democrats out on the campaign trail.
After a week, we can see how the market has responded to these changes and take further steps if needed, but I believe this is all free markets need to heal themselves.
