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EDITOR OF REDSTATE

Senate Republicans Payback Conservative Activists By Betraying Them

By: Erick Erickson (Diary)  |  May 11th, 2010 at 12:42 PM  | 

RESIZE: AAA

Proving they are a petulant bunch, the Senate Republicans today threw up their collective middle finger at conservative activists.

David Vitter’s amendment to the Financial Deform package would have required an actual audit of the Federal Reserve. The amendment was heavily lobbied for by conservative activists across the country.

in fact, so popular was Vitter’s amendment that even Senator Bob Benentt declared on Saturday in Utah that he too would support auditing the Federal Reserve.

Vitter’s amendment died. Bob Bennett voted against it. Senate Republican Leader and Bennett best friend forever Mitch McConnell also voted against it. Jon Kyl of Arizona did too.

There is your Senate Republican leadership. As petulant as ever.

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COMMENTS

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  • Common_Cents

    Sanders passed 96-0. We’ll get the headlines about our noble CONgress getting tough but not a mention of the Vitter amendment.

  • pilgrim

    Sanders Amdt. No. 3738 as Modified; To require the non-partisan Government Accountability Office to conduct an independent audit of the Board of Governors of the Federal Reserve System that does not interfere with monetary policy, to let the American people know the names of the recipients of over $2,000,000,000,000 in taxpayer assistance from the Federal Reserve System, and for other purposes.

    I side with these 96, and I know that I’ll be called a sellout for it. If it helps any I am strongly opposed to the idea of having the Fed bankrolling a brand spanking new consumer protection agency that is not needed and will only cause more harm.. I wish the Sanders amendment stood alone as its own bill.

  • dhorowitz3

    We are going to need to commence a campaign for conservatives for leadership positions. While it is imperative that we secure majorities in congress, it will be meaningless if people like McConnell remain in leadership. If we don’t work on this before the elections the current crop of leadership will claim credit for the victorious majorities and be elevated to majority leader and whip positions. I would love to see DeMint as majority leader and Sessions as Whip.

  • afterseven

    For those of us who haven’t tracked the Banking Bill Amendments:

    1. What was substantive difference between Vitters & Sanders Amendments.
    2. Is there any garuntee Sanders Amendment won’t be killed/altered/watered down in Committee
    3. Is there any good news in the 96-0 vote.

    Other than that, I agree with the above comments that we do not need more Government Bureaucracy for any reason whatsoever…unless it is for the express purpose of tracking and capturing the stolen Mojave Cross and the Atheist Obama supporting perps who stole it.

  • The_Rebel

    with Jim DeMint as the engineer. As he recently told the Washington Post, ?I don?t know that I?m always going to be right, but I do know this: I?m not going to sit on the sidelines again. When we tell people we?re the conservative party ? I want to make sure we have people sitting in those seats who really mean it.?

  • The_Rebel

    with Jim DeMint as the engineer. As he recently told the Washington Post, ?I don?t know that I?m always going to be right, but I do know this: I?m not going to sit on the sidelines again. When we tell people we?re the conservative party ? I want to make sure we have people sitting in those seats who really mean it.?

  • ardvarkmaster

    This is why you NEVER give to the party, only the person.

  • MNConservative

    The Federal Reserve Bank is a banking cartel that went into partnership with the government. The government benefits by having any amount of money available without direct taxation (electronic/printing), and the banks benefit by the money multiplier of fractional reserve rules, charging interest on money made out of nothing.

    It should come as no surprise that even some Republicans are defending the Fed. Without it, government would have to live within its means.

  • Swamp_Yankee

    The other was more populist then conservative. I

    ‘m not keen on letting those who destroyed our fiscal policy from controlling our monetary policy via pressure, regualtions and audits. That’s like letting the “F” students govern the “C” students.

  • afterseven

    Concurring with dhorowitz3 above…Granted, McConnell has been dealt a pretty rough hand, but with each passing day he seems to be cementing his place as the worst GOP Senate leader in history.

    Is it just me or is he completely oblivious to the groundswell of GOP/Independent support for anyone who will Stand (with a capital “S”) in the way of Big Spending/Big Socialist governance. If ever a Hard Liner were needed (and had been actively sought by his constituents and independents as well) that time is now.

    Aside from a yeoman’s effort to wage a PR campaign against HCR…McConnell has failed at every possible level:

    TARP: Fail
    HOPE: Fail
    Omnibus: Fail
    Stimulus: Fail
    HCR: Fail
    Bank Reform: FAIL
    Pelosi’s latest $200 Bln spending quest: ??????

    It’s not as if he didn’t have the backing of the general public…HE DID. MSM aside, the call for a pure obstructionist and not an appeaser has been loud and clear for 20 months. We need a fighter, someone who is on the news daily making the case that we will not vote for “X”, and if it passes, it will be scorched earth from here on out. Simple Message:
    1. No other legislation will clear committee until November.
    2. Then Back It Up.
    The time to shut down, on multiple occasions, the Obama legislative agenda and stall all efforts in committee was lost long ago and far too much territory has been ceded.

    Can Conservatives afford any more leadership from McConnell? The unity that drove Bennett out should be marshaled against McConnell. If you need any example of McConnell incompetence, simply look to the how HCR was fought by the Senate after the House’s 2nd vote in March. It was a failed strategy from Day 1…we’ll beat them in the reconciliation process, we’ll draw out the amendment process….. Smoke and mirrors. Frankly, the Senate effort was embarrassing.

    I remember after Immigration stalled in August 2007 the Senate GOP fund-raising efforts began showing signs of distress. I’m wondering if we are right back at that point in time. Why should I commit resources to an incompetent enterprise, devoid of proper leadership, that cannot and will not protect my interests?

    Mitch McConnell: Nice enough chap, but Wrong Guy, Wrong Place, Wrong Time.

  • http://www.erickerickson.org Erick Erickson

    Sanders worked with Bob Corker to basically undermine the intent of his own amendment.

  • afterseven

    Corker needs to go. Having said that, I’m surprised that a guy like Sanders would undermine his own crucible against the Fed? Then again nothing surprises me nowadays. I’m merely hopeful we can stagger across the finish line on Jan. 3, 2011 without too much more damage.

    My fundamental question is how did this bill escape committee, why did we allow it to reach the Senate Floor. Nothing good can come of this.

  • GT350

    No one is begrudging the people from getting a true financial audit of the Fed’s books. But Vitter’s so-called “Audit” would have given Congress direct oversight of the Fed’s policy. That means Congress would have the power to ***politicize*** monetary policy.

    We all know that politicizing = spending irresponsibly.

    The Fed’s job, using monetary policy, is to restrain inflation by controlling the money supply. That job is to remove the punch bowl when the economic party gets out of hand. I concede that Greenspan did a poor job in the ’90′s and ’00s, and allowed bubbles to form, causing enormous harm.

    The problem with giving that oversight to Congress is to virtually assure that money is free and easy, making it easier to get re-elected. So the spending party will rage into the night, right until the economy goes into a hyperinflationary spiral, Latin American style.

    I honestly believe that removing political influence from the Fed is the best way to restrain excess. THAT is the true Fiscal Conservative solution. Either that or go back to the Gold Standard, and mortally wound the economy. Your choice.

    Finally, let’s realize this is a complicated topic. We can do so without insulting each others’ commitment to Fiscal Conservatism.

  • GT350

    No one is begrudging the people from getting a true financial review of the Fed?s books. But Vitter?s so-called ?Audit? would have given Congress direct oversight of the Fed?s policy. That means Congress would have the power to ***politicize*** monetary policy.

    We all know that politicizing = spending irresponsibly.

    The problem with giving that oversight to Congress is to virtually assure that money is free and easy, making it easier to get re-elected. So the spending party will rage into the night, right until the economy goes into a hyperinflationary spiral, Latin American style.

  • http://impudent.blognation.us/blog kyle8

    I would like to see less political influence by the Fed but the best way to do that would be to enact some standards for monetary policy.

    Standards that remove some of the leeway the directors have in setting rates and increasing the money supply. And the problem there is that no one agrees with what those are.

    To my own mind they would be something similar to what Greenspan did through most of his tenure, but with a healthy dose of rate hikes when mortgage prices began to soar.

  • constitutionalconservative

    We will make our voices heard at the ballot box, though.

    Then we will get *real* change you can believe in.

    We’ve already taken out McConnell’s BFF Bennett. If we can take out his protege Grayson in KY, that will send him a message he won’t soon forget.

  • crassus

    Plays Liar Liar better than Jim Carey.

  • asleep06

    To say that Vitter’s amendment would have allowed Congress to “politicize” monetary policy leading to irresponsible spending is extraordinary. Right now, Congress doesn’t have the ability to audit the Fed. And yet, the Federal Reserve is already out of control in its abuse of its powers, already spending irresponsibly to the tune of hundreds of billions?

    To say that we can’t pass Vitter’s amendment because it will allow Congress to cause the Fed to spend irresponsibly is ignoring what is happening in reality and dreaming of a perfect world where the Federal Reserve is not doing anything wrong and will not do anything wrong in the future. The Federal Reserve is already spending irresponsibly and abusing its powers and will continue to do so without annual audits. That’s why we need the full audits.

    We need openness and accountability especially in institutions that have already shown secretive efforts to keep from the public its abuses.

    But maybe I’m wrong. How will auditing the Federal Reserve lead to the “politicization” of monetary policy when the specific language states that the legislation states it will not involve Congress in monetary policy, unless by “politicization” you mean revealing abuses and holding officials accountable for their actions?

    If you really think that the Federal Reserve cannot or will not by itself cause hyperinflation, you don’t know how monetary policy works. We the people are the only thing that is preventing that.

  • asleep06

    How is not keeping Federal Reserve officials accountable “conservative”?

  • asleep06

    Where do you get from “restrain inflation by controlling the money supply” to “give insolvent banks and other financial institutions hundreds of billions of dollars without breaking them up and so allowing them to continue harvesting profits at the expense of the U. S. taxpayer”? And so, because we are fiscal conservatives, we don’t want to keep officials accountable to the limits proscribed by the job descriptions and common sense?

    And no, going back to the gold standard or allowing the Fed to run amuck aren’t the only two choices. Not by a long shot.

  • afterseven

    When the Price of auditing the Fed is an afterthought to legislation that creates a massive new Fed Bureaucracy and the attendant 10 fold multiplicity of regulations that will strangle free market capitalism.

    So when looked at in totality….the Bank Reform bill is NOT conservative under any definition of the term that I’m aware of…except maybe as defined by a member of the coffee party.

  • MNConservative

    “We all know that politicizing = spending irresponsibly.” It is exactly the EXISTENCE of the FED that allows Congress to spend irresponsibly. Artificially low interest rates, anyone?

    “The Fed?s job, using monetary policy, is to restrain inflation by controlling the money supply.” Then they’ve failed miserably. Since the Fed was instituted, the dollar’s value has dropped by 98%.

    “Either that or go back to the Gold Standard, and mortally wound the economy.” I disagree that a Gold Standard would wound the economy. Yes it would wound those who make their money through FRAUD, but I think that’s OK. Here’s a great idea by a well known RedState Luminary: http://www.redstate.com/mnconservative/2009/04/06/the-future-of-credit-a-workable-system/

  • GT350

    I’m not a fan of government spending, but I supported TARP when it was proposed, and I think it has done an exceptional job of stabilizing the financial economy. Some $245bn was disbursed, and $181bn has been paid back, not including $11bn in Citi Warrants. So the U.S. Taxpayer got vast majority of his money back. AIG was at $42bn and is unlikely to be repaid in full, but we’ll get some back. Not to say I”m happy about AIG, either.

    The major qualm I have with TARP is how it was politicized to bail out General Motors at $21bn. But that should show how politicians will politicize any money they can get their hands on. Thankfully, there was little of that.

    By stepping forward forcefully and backstopping financial institutions, a true financial crisis was averted. If it wasn’t, we would have had a catastrophe. The U.S. and global economy would have exploded, like a car engine without oil. The entire U.S. economy, all $14 Trillion’s worth/yr, would have come to a complete screeching halt. In that sense, the TARP backstop was a screaming success.

    Again, this is a complicated topic. We can disagree with the details, but support for the Fed’s independence and support for U.S. extraordinary actions to save the economy ARE consistent with pro-market, pro-economy, financial conservatism.

    And yes, in fact, I do know how monetary policy works. I am an Instructor in Finance at a local university. In my day job, I’ve worked for 20 years in Finance and Banking. I don’t work for a bank today, and frankly, I’m not a fan of Wall Street governance. But yes, I do know what I’m talking about, and I think most of the populist fervor is because people DON’T know how monetary policy works.

  • Common_Cents

    This is the correct policy. Big banks are now taxpayer money junkies.

  • aesthete

    and given that the choice was between a partial de facto socialization of the banks, or fighting hobos over McDonald’s food scraps (which would have had people screaming for even greater government intervention), I don’t think that there was much real choice in the matter. (Stimulus II was another issue altogether, but I digress.) Unfortunately, until the perverse incentives are removed and the market restructured, we’re just going to see the problem re-emerge later down the line in some form or other.

  • GT350

    This is a complicated topic, and I”m willing to entertain many viewpoints. But here’s where you lost me, after I clicked that link.

    “My solution is quite simple: It should be illegal to lend other people?s money.”

    Here’s where you & I will disagree to the end. You can’t run an economy without credit. You can’t even run an agrarian economy without credit, much less one dependent on international trade. If you want to go back to the barter system, then fine. Go for it, but set a good example and turn off the computer, and go out and start raising chickens, so you can trade them for bread.

  • tngal

    Apparently Mr. Bennett wanted to drop a little bird poop on the republicans following his vote of no confidence this weekend. Oh well, it washes off.

  • http://www.hakubi.us/ Neil Stevens

    I know I sure don’t want the socialist looters of the Democrat party “auditing” the Fed.

  • Richard Mullins

    Auditing the fed doesn’t nothing on the points that matter, like the European crisis and the looming Chinese meltdown(looks it coming really soon). Politicians are the worst when dealing with money and we shouldn’t let them play with.

  • Catan

    Is the voting record on the Vitter Amendment available yet?

  • http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

    We the People have a right to know where our money is spent. And even if they are technically creating money that is not our tax money, every dollar they print affects the value of our money. They should always have been at least subjected to this kind of audit on a regular basis.

    I assume the alternative was more politicized audit by Congress?

    My question is: Are three degrees of separation enough for even the vaunted GAO to be deemed non-political? probably?

  • MNConservative

    “You can?t run an economy without credit.” I didn’t suggest we run the economy without credit.

    What I suggested is that it be illegal to lend other people’s money. There is a BIG difference! Banks would be like “financial E-harmony” arranging and facilitating loans between the creditor and debtor.

    Banks currently make their money by charging interest on money created out of thin air by the fractional reserve process. As Griffin points out, if you can charge interest on money made out of nothing, you don’t have to charge must interest to show a profit.

    However, this process causes the business cycle of boom/bust, and when the bust comes about, we have to bail out the banks, or the bank’s debtors, over and over and over.

    On a side note, I have been wanting to buy chickens for some time… :-)

  • kowalski

    They can be bitter and petulant, but it doesn’t really matter. There are plenty of groups of people in this country that are effectively starting their own currencies based on ethnic group because they’re convinced the End is Coming.

    And I’m not talking about the people you usually think of, either. There are a lot of folks — normally Democrat voters — who are convinced that the Republic is on the skids and is only going to be more on the skids as time goes on, and they’re working on creating their own barter and currency systems to make sure they can have some kind of economy to live on — with their kin — when ours falls apart.

    I wouldn’t believe this if I hadn’t seen it with my own eyes. Here in America, and particularly where I live, the currency is seen increasingly has having a very short shelf-life.

    That’s the fact, jack. The people at the Fed can do whatever they want but it isn’t going to change that motivation among people who are convinced increasingly that they’re going to be living in a barter economy with strong ethnic/clan/family ties in another couple of years.

  • kowalski

    The Federal Government can do whatever the President and the Congress and the Courts decide, but they’re not going to really be able to arrest and detain millions of people in country who believe that it’s all smoke and mirrors.

    And there are a larger and larger number of them who do. And they’re doing something about it.

  • pilgrim

    The Sanders amendment passed 96-0 and should have been a bill of its own. But no, they have got to have it as an amendment to a bill to have the Fed bankroll a brand new federal consumer protection agency that will have the sweeping power to do some serious damage.

  • kowalski

    But the most remarkable thing I’ve found talking with people who normally wouldn’t associate with each other in the past year is that there is an absolutely pervasive, enormous distaste for both goverment and large corporations.

    Regardless of whether that is correct or not on an individual basis, most people do not have the background information and expertise to know. And the result is that they are lumping them all together into a generalized distrust of what really constitutes a lot of the country in terms of its economy.

    It’s going to get worse the more people in Washington dicker around. But they can’t stop dickering, because they’re too smart, I guess.

  • pilgrim

    http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=2&vote=00138

  • Richard Mullins

    and this isn’t on their list of things to do even though it’s the best thing. The polarization of the Democratic party is still there and doesn’t really want compromise a little, just pluck off a wayward Republicans that have nothing to lose.

  • http://xmmlbchat.blogspot.com katesmith

    I haven’t been able to locate the exact names of the 12 private banks and their owners (that comprise the Fed), so that alone would be worth knowing. I notice Jeffrey Immelt of GE is a director or officer in the NY district. He’s almost as ubiquitous as Soros. There are clips on You Tube of the Fed being lambasted by Alan Grayson, D., Fla., who’s been on the issue for awhile.

  • fpete13527

    McConnell needs to go.

  • http://xmmlbchat.blogspot.com katesmith

    Noticed NY Times write up on Mr. Erickson, “CNN contributor Erickson draws ire from all sides,” by Shaila Dewan, 5/11. It gave a balanced view, at least at first glance. I mention it here because this post was authored by Mr. Erickson.

  • asleep06

    TARP was a joke. First of all, the bailout money wasn’t the government’s to lend to the banks. There is no place in the constitution where the federal government is authorized to bail out private banks. Second of all, the money wasn’t even used to purchase what it was publicly stated to purchase: the Troubled Assets. It was instead used to re-capitalize the banks, which means the troubled assets are still on the balance sheets of the banks but are being marked to fantasy instead of marked to market. So your “exceptional job of stabilizing the financial economy” is a complete farce that simply puts off the pain till later when younger people who had less of a role in creating the mess will bear the brunt of it. That is simply unfair and immoral. And it does nothing to solve the long-term problem but only makes it worse.

    Saying TARP was a screaming success is like saying Joe who is $5,000 in debt to Frank gets a loan from Citibank of $5,000 at 10% interest to pay off Frank. Take a step back and look at the big picture. Short-term thinking is killing the country. Kicking the can down the street is not helping.

    What evidence do you have that the “entire U. S. economy” would have come to a complete screeching halt if TARP had not passed? The run in the money markets was stopped by merely closing that market for a day; TARP wasn’t passed for weeks so that couldn’t have done it. Many regional and local banks did not have exposure to securities and derivatives; they would have been fine. Many banks would have died and rightfully so; but that’s the free market.

    What is this “independence” of the Federal Reserve that you’re trying to defend? It can’t be to let the Federal Reserve do whatever it wants as long as it declares the global economy’s going to blow up if we don’t let it? We need to stop with the vague slogans and actually talk about concrete reality. Auditing the Fed is not going to do anything but reveal what exactly it is doing and correcting its abuses.

    Why do you think the populist fervor is mostly from not knowing how monetary policy works? It seems to me that it’s because they do understand the fact that the banks are getting bailed out at taxpayer expense but other industries are not (not that they should be, but if you bail out the banks…). And the attempts to keep “too big to fail” from happening again is being opposed by so-called conservatives. As long as we’re speculating on motives, my guess is the opposition to real reform stems from the political establishment’s financial and emotional investments in the current banking system.

    As a finance instructor, do you subscribe to the Keynesian or a Monetarist school?

    It is not conservative to stare the reality of the failure of modern Monetarist and Keynesian economics and keep doing the same things over and over again.

  • asleep06

    If politicization means partisanship, I agree with that. But in fact TARP was incredibly politicized, just as a bi-partisan affair because both parties have entrenched economic and political interests in keeping the status quo as long as they are in office. McCain actually interrupted his political campaign to fly over to Washington to push for TARP. Obama was already in support of it.

    It is frankly incredible that people still believe the bankers and finance politicos who tell us the world was going to end unless we gave them unconstitutional powers, socialized their losses and allowed them to run unprecedented profits off of U. S. Treasuries that comprise part of the national debt that will be repaid by taxing everyone else. Their world was going to end; and in a real free market system, it should have. Our world would and should have been shocked, there would have been major economic losses in the short-term, but over the long term we would have taken out loads of Wall St–DC corruption, stupid risk-taking, and socialism and come out better in 10 years. Now we’re just going to have a repeat of Japan’s miserable lost decades which is going to get even worse in an aging nation.

    The biggest problem facing the nation is the pervasiveness of short-term thinking.

  • asleep06

    The question was how the language of the Vitter amendment is less fiscally conservative than the language of the Sanders amendment. The rest of the financial reform bill is not part of the discussion for the decisive reason that both the Vitter and Sanders amendments will be part of a larger reform bill. Does that make sense?

    But I agree with your sentiment that the amendments would be better passed as separate bills. That’s obvious. We don’t need more micromanagement. We need Vitter/Paul’s language and we need the Kaufman-Brown amendment limiting the size of financial institution balance sheets to about $300 billion so we don’t have any more “too big to fail” bailouts. And then let the banks fail.

  • asleep06

    nt

  • asleep06

    I agree with MNConservative, but I want to spell out how the gradual elimination of fractional reserve lending is not the same thing as eliminating credit.

    The problem with fractional reserve lending is that it is inherently unstable because it lends out deposited money while still allowing people to spend that money. So if I deposit $100 into a bank, the bank lends $90 out to Shoemaker Joe and I can still spend that $100 by writing a check to Dentist Jack. So that $100 turns into $190 in the actual economy. That $190 is deposited again into the banks, and because of fractional reserve lending, is continuously multiplied leading to financial instability and a boom cycle, which is inevitably followed by the bust cycle when demand is sated and people start paying back loans.

    So how does the alternative still use credit? The alternative is to eliminate the ability to spend money that has been loaned out. In other worse, either you deposit money for your own use which cannot be loaned out, OR you deposit money which can be loaned out at interest but you are not allowed to access that money for a particular duration (while still receiving interest). This is how Certificates of Deposits work today, so it’s eminently doable.

    Right now, money is used twice which creates the illusion of growth in the economy but which is eventually revealed as inflation when bubbles burst. That needs to stop.

  • aesthete

    that relative to other legislation, the final product was more or less the same as how it was proposed. Besides the use of some of TARP to bail out GM, it was mostly used as advertised, regardless of your thoughts on whether its stated objective was good or not. This is as opposed to most government programs and initiatives passed.

    Arguments on Constitutionality and free-market principles are valid, but IMO, it was an argument more applicable to the original legislation and ineptitude that got us to this point. Long-term thinking, similarly, applies more to changing the perverse incentives that led to TARP. Ideally, TARP would be a one-time bailout of the banks, and restructuring of incentives would prevent “too big to fall” from being a problem in the future. I understand the arguments against TARP, but at the same time, appreciate that we didn’t have to take a plunge down the precipice.

  • http://xmmlbchat.blogspot.com katesmith

    I’m on an email list from a Florida grassroots group that started years before Tea Parties but has joined in with some TP along the way.Tonight the email list had requests from 2 well respected people in the Fla. group to welcome in Newt Gingrich to the fold, that he is starting American Solutions groups around now, is reaching out to Tea Party and activist groups, and they suggest people go to his meetings. I was revolted by this. I see a combination of petulance, wanting to be in charge, and wanting to diffuse the Tea Party movement in hopes of keeping the current crooks in power. I wrote back to one of the people begging him not to support Gingrich.

  • asleep06

    The final product of TARP was not “more or less the same as how it was proposed.” It was proposed as a program to purchase troubled assets (hence Troubled Assets Relief Program) to get them off the balance sheets of the stupid banks that bought them. What it actually did was to leave the troubled assets in the banks and instead give them hundreds of billions of dollars in recapitalization to do whatever they wanted. That’s not “more or less” the same thing. Do you know why? Because the troubled assets are still on the bank balance sheets, just being marked to fantasy, and so the banks are still insolvent. In other words, nothing has actually changed except that the banks got hundreds of billions in money to play with and no one actually knows how the money is being spent. We’ve just kicked the can down the road at the cost of billions that the banks taking in profits.

    It is when people choose to ignore the reality staring them in the face that the debt and insolvency has not gone away but merely been postponed and exacerbated (‘thank God we didn’t take the plunge’) at the cost of billions going into the hands of the very same bankers that by their willful negligence caused the crisis in the first place that I fear most for the country.

    Your response shows that you *don’t* understand the arguments against TARP or the continued neo-Keynesian idiocies being perpetuated. “Restructuring of incentives”? This is the thinking process of statists and it shows how “conservatives” are becoming “statist-lite.” Restructuring by whom? You? Me? The only answer is the people who have the power to do so: the political and economic establishment. But this is central economic planning which both empirical history and theory shows us does not work. We don’t need to “restructure” incentives. At the federal level, we need to get rid of them, period, no matter what interests “incentives” help, whether bankers, homeowners, low-income minorities, gun owners, journalists, teachers, whatever.

    Regardless of your intentions, in the reality of our current situation “appreciate that we didn’t have to take a plunge down the precipice” simply means “I’m glad I don’t have to deal with it now even if it’s making things worse down the road for people who didn’t make the decisions that are responsible for my mess.”

  • speckk

    Some of our early 20th century liquidity issues stemmed from a strict gold standard which failed to represent the value of the economy. Buying up a gold backed currency with other assets amounts to free tax payer subsidized gold storage.

    Since we now operate on a faith currency, the money supply needs to represent all the value in the economy, and should grow with the economy. I talked with several aspiring, current and former congress critters over the last couple of months and while I agree that ending the fed is a good thing, former representative Merrill Cook was at a loss for words when I asked him if congress can be trusted with the money supply after he panned most of them for being corrupt.