The American Spectator

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I am puzzled why the supporters of the bailout haven’t produced definitive statistics showing that credit sources are drying up. I’ve read a lot of anecdotal evidence, but am not persuaded that it justifies laying out $700 billion.

p>Also, why hasn’t the government demanded to examine the loan portfolios of banks so Treasury doesn’t have to buy a pike in the poke, and can get a better idea about the size of the crisis? br> — Ray Kisch /p>

Quin hit the nail on the head in so many places.

He gave due credit to the FDIC, SEC, and the Fed Reserve. Those institutions were able to stem the immediate tsunami within their existing authority — and they were able to do it largely behind the scenes (unlike Hank Paulson, who was clamoring for camera time at the drop of a hat). The only nit I have is that Quin intimates that there is still a requirement for some sort of Government-sponsored bailout, but maybe just not as big as was first proposed by the Administration, or as passed in the Senate last night.

I’m of the opinion that no bailout is required. Yes, legislation will need to be passed and signed. But it certainly should not be in the form of a bailout at taxpayer expense. Instead, the legislation should only address two issues: taxes and divestment. Congress should set the capital gains tax to 0%; this will repatriate the $6 trillion sitting in overseas accounts — U.S. companies will need to find ways to invest those funds — guess where the capital will go? Congress should also set the corporate tax rate to 0%; we pay them at the retail level anyway — companies are simply clearinghouses in the collection of those taxes. If both taxes are zeroed-out, the US economy will double in five years, and tax revenues will shoot through the roof to the point where the public will be clamoring for a further income tax decrease. The divestment, of course, would cover Fannie Mae and Freddie Mac. They should simply cease to exist.

Quin rightly identified our up and coming conservative leadership holding public office. One individual member I would also like to highlight is Congressman Mike Pence. Never mind that Rich Lowry of NRO fame called him “irresponsible” (I can hear WFB moaning and turning in his grave), Rep. Pence is a major guiding force in the House of Representatives and is the keeper (among some others) of the conservative movement in that institution. Even though he is in the minority, Mike’s voice commands respect. His speech on the House floor before the vote on Monday made me proud to be associated with the movement.

At the end of the day, the post-mortem on this fiasco will show that the starting point was passage of the CRA; the tipping point was the relaxation of loan standards in ‘99; and that the glue holding it all together was in the form of two unaccountable GSEs.

p>Now it’s time for the free market to do what the Government could never do — institute internal reforms that make sense and that can be self-governed in this economy. br> — Owen H. Carneal, Jr.