Bailout Rejected, Affordable Housing Mandates and Faltering Stock Values
The House of Representatives rejects the White House’s proposed $700 billion corporate bailout plan.
Thirty years of “affordable housing” laws take some of the heat for the current mortgage and financial crisis.
A dramatic plunge in stock values shakes consumer confidence.
More headlines: listen to the LibertyWeek podcast.
The Competitive Enterprise Institute Daily Update
Tuesday, September 30, 2008
Issues in the News
1. CONGRESS
The House of Representatives rejects the White House’s proposed $700 billion corporate bailout plan.
CEI Expert Available to Comment: Center for Entrepreneurship Director John Berlau reacts to the good news:
“[It’s a happy day] for all those who value freedom, responsibility and the true free market in which individuals are free to profit from their risks on the condition that they don’t stick the rest of us with their losses. It’s not hyperbole to say the Republican and Democratic backbenchers who defied both parties’ leadership to defeat this $700 billion package of Wall Street socialism literally saved America. Whatever their reasons, this defeat (or rather victory for freedom), means that America is much less likely to turn into France, Venezuela, or the old Soviet Union, as this bailout/nationalization package would have set us on the road to becoming.”
2. FINANCE
Thirty years of “affordable housing” laws take some of the heat for the current mortgage and financial crisis.
CEI Expert Available to Comment: Policy Analyst Michelle Minton on how these perverse regulations have led us down this road:
“Unfettered greed is the suspect many point at to explain the current economic crisis. To some extent, they are right, but it isn’t irrational greed on the part of bank managers or fat cat CEOs. It is the unwieldy bank regulations that forced the entire industry to walk the proverbial plank and then blame it for drowning. Critics have alternately claimed that over-regulation and under-regulation are the causes for the current crisis. I believe one specific regulation, the Community Reinvestment Act (CRA), should shoulder a lot of the blame for creating an environment where a lending institution’s short-term survival hinged on it making the decisions that in the long-term would likely cause its demise.”
3. CONSUMER
A dramatic plunge in stock values shakes consumer confidence.
CEI Expert Available to Comment: Senior Fellow Iain Murray on how to steer clear of future financial meltdowns:
“We have to ask how to protect future viable assets and investments, not just what we should do about past failed assets and investments. The bailout plan is exactly the wrong approach. It puts in them in jeopardy because not only does it tread down the policy road that led to the Great Depression, as Martin Hutchinson powerfully argues, but because real capitalism provides strict disciplines that actually provide better protection than government regulation. We will not succeed in protecting our children from a future financial meltdown if we merely put in place the exact parameters for it to happen again.”
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Richard Morrison / Director of Media Relations / Competitive Enterprise Institute
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