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  • Monthly Archives: September 2008

    Latest Bailout Draft Makes Constitutional Questions Worse

    After Secretary Paulson released his first bailout draft, we enumerated some threshold constitutional issues that the proposed legislation failed to pass. The latest House bailout draft not only fails to address these concerns, it actually creates brand new ones. The most glaring problem with the original proposal was the lack … More

    The Auto Bailout: What’s Behind the Wheel?

    As discussed in Senior Research Fellow in Regulatory Policy James L. Gattuso’s recent blog post, the House this week approved a new $25 billion loan program for Detroit automakers, and the Senate is expected to soon follow suit. The loans are to develop alternatives to conventional fossil fuel powered vehicles … More

    The Other Bailout: Is $7 Billion Still Real Money?

    Only in Washington can $7 billion dollars be considered a small amount.   But that seems to be the feeling among many in Congress, which is on the verge of approving a bailout for Detroit automakers.   As approved by the House on Wednesday, the program would provide for $25 billion in … More

    Protecting Taxpayer Profits While Minimizing Government Interference

    It is only fair for taxpayers to expect to benefit if hundreds of billions of dollars of their money is used to purchase poor quality debt from financial services firms. However, taxpayer profit sharing must be carefully structured to avoid endangering the economy’s recovery by discouraging firm’s to participate in … More

    Morning Bell: Market Rescue Dos and Don'ts

    Leaders of the liberal majorities in the House and Senate yesterday  tried to claim they had completed a deal with the White House to address the Wall Street crisis. From the beginning, leaders on the left have both demanded the White House deliver conservative votes for any deal and then refused … More

    Deal Breakers

    In the previous post we enumerated what any financial clean up legislation must have to earn conservative support. But as important as federal action is, there is a strong possibility that further government intervention will only make the situation worse. To make sure this does not happen, and deal must … More

    Democrats Try to Push Expensive Stimulus Past Distracted Congress

    Congressional Democrats think they have spotted an opportunity. With lawmakers and the American public focused on the pressing financial crisis, both Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Harry Reid (D-NV) are rushing another massive spending bill through Congress. In ordinary times these bills would be debated at length … More

    Any Financial Cleanup Plan Must...

    Democrats on Capitol Hill are claiming they have reached a deal with President Bush on a plan to cleanse the financial system of bad housing-related assets. So far, it doesn’t seem as though any conservatives have signed on. As lawmakers debate the merits of the sketchy plan, we have identified … More

    Understanding the Credit Crisis

    Heritage fellow JD Foster explains what led to the credit crisis and why it cannot be ignored. There are unprecedented problems in the financial markets. The Federal Funds Rate is the No. 1 tool that the Federal Reserve Board has for governing monetary policy. The Federal Funds Rate jumped much … More

    The Gathering Storm

    According to Rasmussen Reports only 30% of Americans currently support a government clean up of the financial system. The reason why? 50% of Americans “say it’s better for the government to let the companies that made financial mistakes go bankrupt.” As a general rule, we agree with this principle. However, … More