“Bailout plan splits free-market backers”

by

Milton Friedman, patron saint of free-market economics

http://www.washtimes.com/news/2008/sep/28/bailout-plan-divides-free-market-backers/

The battle among free-market groups is largely between the more establishment conservative think tanks such as the Heritage Foundation and the American Enterprise Institute, among other well-heeled organizations, and smaller, lesser-known groups who blame the economic turmoil on too much government intervention in the marketplace. Some groups, such as Heritage, admit to deep division within their own ranks.

“There’s enormous division in our community. All free-market people share the belief that the current circumstances are atrocious. The debate is over what should be done about it,” said J.D. Foster, senior economist at Heritage and a former Bush administration official.

After much internal debate among Heritage officials, which one participant called “spirited,” Mr. Foster wrote a memo for the foundation’s Web site that said Treasury Secretary Henry M. Paulson Jr.’s bailout plan “could be justified only if the United States financial system is at risk and the broader economy is under threat of a deep recession. The current situation appears to meet this test.”

Mr. Foster notes that the plan was also being supported by a bevy of free-market economists, including Kevin Hassett at AEI, Wall Street adviser and CNBC host Larry Kudlow, and former Bush White House economic adviser Larry Lindsey.

See also:

http://online.wsj.com/article/SB122257682963083173.html?mod=special_page_campaign2008_mostpop

http://hotair.com/archives/2008/09/28/bailout-deal-reached/

Negotiators on Capitol Hill finally reached an agreement on a sweeping bailout of the financial sector by the Treasury early this morning, attempting to head off bank runs and panics around the world when the Asian markets open tonight.  The plan includes options for asset insurance that House Republicans demanded, as well as broad accountability for actions taken by Treasury in purchasing assets.  The deal also allows a wider group of banks to rid themselves of the toxic assets, created in large part by Congress over the last ten years.

4 Responses to ““Bailout plan splits free-market backers””

  1. rosettasister Says:

    See also:

    http://www.cbsnews.com/blogs/2008/09/28/politics/fromtheroad/entry4483589.shtml

    (WASHINGTON, D.C.) – John McCain issued a tentative endorsement of the bailout package still be hammered out here this morning. “The outlines that I have read of it, that this is something that all of us will swallow hard and go forward with,” McCain told George Stephanopoulos this morning on ABC’s “This Week,” adding that the provisions he wanted included in the legislation have been met. “Protect the taxpayer, make sure that there isn’t excessive compensation for CEOs, an oversight body, not leaving all the decisions in the hands of one individual. There’s other provisions that I think are met here.”

    McCain did not seem willing, however, to endorse another stimulus package. “We did a stimulus package a few months ago, as you well know. It had very little beneficial effect,” McCain said. “I would like to see incentives for businesses to be grown and locate. That’s lower taxes.”

    McCain often talks on the campaign trail about lowering the U.S. business tax, which is currently at 35%, as a way of making businesses more competitive and therefore more prone to investing in the communities where they’re located.

  2. dwrugh Says:

    The bailout plan is a bad idea on so many levels. Government is intervening in a natural consolidation of the financial services sector after a huge run up there – the sector accounted for fully 1/3 of *all* US corporate profits in 2006.

    Dave
    http://www.islandersoftware.com/weblog/2008/09/27/just-say-no-to-the-bailout-plan/

  3. rosettasister Says:

    Thank you, dw, for your input.

    So, you are not persuaded by Eric Cantor?

    “We want to make sure Wall Street shares the pain of the plan” Eric Cantor – VA

    House Republicans want to see the legislative language on the bailout before they decide whether to support it, said Rep. Eric Cantor, R-Va.

    “We’re waiting to see what this looks like on paper to see if we have an agreement,” Cantor said.

  4. Scroll for updates: Bailout Deal Reached With ACORN, And Other Pork Removed | Right Voices Says:

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