This is the fourth installment of “Providing Relief from the Crisis.” Read editor-in-chief R. Emmett Tyrrell, Jr.’s introduction here.

Fifty-eight days have passed since Treasury Secretary Henry Paulson created the Capital Purchase Program. Under CPP, Paulson allocated $200 billion of taxpayer money to shore up banks’ balance sheets.

Instead of stabilizing the capital markets, many of these banks have used this government hand out to buy up their competitors. The Washington Post reported that J.P. Morgan Chase, BB&T, and Zions Bancorporation all said that they were considering using “some of their federal money to buy other banks.”

The New York Times quoted an executive of J.P. Morgan bank as stating that the federal money would allow the bank to be “more active on the acquisition side or opportunistic side.” In his own words, “I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Sterns mergers.”

Meanwhile, many regional and smaller banks are still not lending. As Treasury funds are slowly becoming accessible to smaller, regional banks, many of these banks have been forced to record major losses in the valuation of their assets, some of which have experienced no credit losses.

Instead of giving these uber-banks a blank check to conquer their smaller competitors, Congress should push the Securities and Exchange Commission to move towards replacing mark-to-market accounting with an accounting system that reflects a truer picture of economic value than does mark-to-market. William Isaac, former FDIC chairman, has been an early advocate to moving towards historical-cost accounting to better improve the “real economic value” of assets. Washington’s policymakers should follow his lead.

Under the Financial Accounting Standards Board (FASB) rules, namely SFAS 157, mark-to-market accounting was implemented to provide investors with a more accurate, up-to-date asset price. Yet, its application led to a rapid decline of asset values. Banks and corporations alike have been forced to write down assets, and have been left with contracted balance sheets.

Banks will not begin to start lending to their communities until they can reappraise the value of the assets they already have on their books. To get the American economy running, Americans need access to credit so that they buy cars, take on mortgages, and pay for their children to go to college. We cannot wait for Treasury’s funds to slowly chip away at the credit crunch. With this reform, Washington would do more to stabilize the financial markets without costing the taxpayer a penny.