Advice to McCain on Tonight’s Debate
Press Release
Advice to McCain on Tonight’s Debate
Washington – The Club for Growth PAC urges Senator John McCain to seize the mantle of leadership on the economy in tonight’s second presidential debate.
In order to do so, Senator McCain will need to do two things. First, he needs to explain to the American people exactly how we got to this crisis point. There is a temptation to use Wall Street and the free-market as a scapegoat, but this revisionist history is factually wrong and will only lead to counterproductive government responses. Instead, Senator McCain should explain how the federal government caused this debacle with an inflationary monetary policy, legislation pushing banks to lend to un-creditworthy borrowers, and politicians who refused to properly regulate and capitalize Fannie Mae and Freddie Mac.
After all, Senator McCain has long encouraged reforming Fannie and Freddie, while Senator Obama remained silent and his Democratic colleagues actively resisted regulatory reforms. Politicians on both sides of the aisle—led by the Democrats—pushed irresponsible housing legislation including the Community Reinvestment Act and the American Dream Downpayment Initiative. Senator McCain should ask Senator Obama why the American people should trust him and the Democratic Party to fix this crisis when they played such a big role in creating it.
Second, Senator McCain should list specific, targeted steps Congress can take to alleviate the current crisis. These include:
- Call for an immediate and temporary FDIC guarantee of 100% of transaction accounts for all banks that choose to pay the corresponding insurance premiums.
- The Treasury’s recent guarantee of money market funds necessitates this measure to ensure confidence in banks and prevent unnecessary runs on banks
- Insist on new accounting rules for assets without a market.
- In highly illiquid markets, mark-to-market rules are inappropriate, misleading, and damaging to banks as the resulting paper losses pressure them to sell assets at fire-sale prices.
- Eliminate the capital gains tax as a way to spur investment, help the equity markets recover, and help recapitalize banks.
- Eight European countries have already eliminated individual capital gains taxes and more are considering doing so. The United States should be ahead of this curve, not behind it.
- Call for a cut in corporate tax rates to 12.5%.
- McCain’s call to lower this rate to 25% is a good start, but the current crisis calls for bolder measures. Our current tax regime puts us at a large competitive disadvantage vis-à-vis other countries. Countries like Ireland, who cut their corporate tax rate to 12.5%, have experienced an explosion in economic growth. There is no reason why the U.S. should be lagging behind.
- Announce a 5% across-the-board cut in government spending, excluding only defense, Social Security, veteran programs, and Medicare.
- McCain’s call to freeze portions of the federal budget is a huge improvement over the enormous spending increases proposed by Obama, but Americans have come to appreciate how wasteful the federal government is and would welcome a modest spending cut.
“Tonight, Senator McCain has an opportunity to demonstrate to the American people that he has the judgment and experience to tackle the economic crisis,” said Club for Growth President Pat Toomey. “He also has an opportunity to demonstrate that Barack Obama’s Democratic Party has been wrong from the very beginning. We encourage Senator McCain to seize that opportunity.”
PAID FOR BY CLUB FOR GROWTH PAC AND NOT AUTHORIZED BY ANY CANDIDATE OR CANDIDATE'S COMMITTEE. 202-955-5500.
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HT: Steve Bartin
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I just realized that I have three songs on my iPod with "Freedom" in the title.
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Freedom by David Gray (one of my favorite singers)
Freedom of the Road by Martin Sexton (fun song)
That got me thinking. What other similar songs are there? According to this website, there are 39 songs simply called "Freedom." And this website suggests there are 400 songs with "freedom" in the lyrics.
Very cool.
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Presh Talwalkar provides five ideas about game theory and how it relates to voting.
Wesbury's Latest Economic Forecast
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From economist Brian Wesbury (PDF):
We are witnessing economic weakness the source of which is different than every recession in the past 100 years. Other recessions have been caused by some combination of monetary tightness, higher taxes, or protectionism. The current weakness is not due to any of these factors. Instead, it is the blowback from a massive amount of bad lending (itself ignited by loose money) mixed with overly harsh mark-to-market accounting rules.
The combination of bad loans and prevailing accounting practices has caused fear and panic in the financial system, in turn causing a huge decline in the velocity of money – how quickly money turns over in the economy. We believe the Federal Reserve will respond to the current situation by cutting rates by 100 basis points, back down to the 1% level that prevailed in 2003-04.
A slowdown in velocity will not only suppress real economic growth but also slow inflation. However, the credit crunch will not last forever. We expect the lack of confidence now permeating the financial system to dissipate in the next few months, leading to a return to healthy real GDP growth and rising inflation in the second half of 2009.
2009 State Business Tax Climate Index
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I just received Lessons from a Road Warrior by John Rutledge in the mail today. The subtitle says it all: "How I fell off a horse, earned 15 million air miles, got sand in my shoes and learned how to invest." Rutledge is one of my most favorite economists so I'm looking forward to reading his book.
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Afterwards, I'll be sure to share my thoughts on both books.
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Cold war ads from the 1950s and 1960s.
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HT: Robert Lawson
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Juan Carlos Hidalgo at the Cato Institute makes a point that needs to be made often. When countries don't behave in a manner that we support, we shouldn't punish them by taking away their trade benefits. When you do that, you aren't punishing the foreign government, but instead, the foreign companies that trade freely with our own domestic companies. It's infringement of economic liberty. And that's usually the reason we get tough with foreign governments...because they are abusing freedom. Notice how nonsensical that is?
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The Ig Nobel Prize, "for achievements that first make people LAUGH then make them THINK" was awarded on Thursday night. Here is the list of winners.
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THE DAILY NEWS
Voter-Fraud Chaos - Ken Blackwell & Ken Klukowski, New York Post
Bailout Vote-Switchers Tell Their Stories - Patrick O'Connor, The Politico
Bailout Isn't as Bad as Main Street Thinks. It's Worse. - A. Kling, EconLog
Standing Still and Falling Behind - Chris Edwards, National Review
Will The Bailout Work? - Michael Spence, Forbes.com
Obama's Payoff to Unions - Mark Skousen, Human Events
A Failure to Lead - Washington Times Editorial
Economic Woes Dim GOP Chances - Reid Wilson, Politics Nation
A Replay Of 1929? Don't Count On It - IBD Editorial
House Republicans Defend Deregulation - Jim Snyder, The Hill
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Bill Whittle has the scoop for Pajama Media TV.
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This says it all. According to Rasmussen Reports, 59% would vote to replace the entire Congress.
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Twelve counties in Northern California and Oregon want to secede from their respective states and form Jefferson, the 51st state.
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From The Daily Item in Pennsylvania:
All 49 of the new Democratic [House] lawmakers in 2007 sponsored or co-sponsored at least one earmark for a combined $351 million. Freshman Republicans got approval for projects worth $65 million.
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UPDATE: Here's the official tally.
UPDATE II: Here are the House members who originally voted NO on the first bill, but were persuaded to vote YES on the second bill:
| LAWMAKER |
LAWMAKER |
| Abercrombie (D-HI-1) |
Lee (D-CA-9) |
| Alexander, R. (R-LA-5) |
Lewis, John (D-GA-5) |
| Baca (D-CA-43) |
Mitchell (D-AZ-5) |
| Barrett (R-SC-3) |
Myrick (R-NC-9) |
| Berkley (D-NV-1) |
Ortiz (D-TX-27) |
| Biggert (R-IL-13) |
Pascrell (D-NJ-8) |
| Boustany (R-LA-7) |
Pastor (D-AZ-4) |
| Braley (D-IA-1) |
Ramstad (R-MN-3) |
| Buchanan (R-FL-13) |
Ros-Lehtinen (R-FL-18) |
| Carson, A. (D-IN-7) |
Rush (D-IL-1) |
| Cleaver (D-MO-5) |
Schiff (D-CA-29) |
| Coble (R-NC-6) |
Schmidt (R-OH-2) |
| Conaway (R-TX-11) |
Scott, D. (D-GA-13) |
| Cuellar (D-TX-28) |
Shadegg (R-AZ-3) |
| Cummings (D-MD-7) |
Shuster (R-PA-9) |
| Dent (R-PA-15) |
Solis (D-CA-32) |
| Edwards, D. (D-MD-4) |
Sullivan (R-OK-1) |
| Fallin (R-OK-5) |
Sutton (D-OH-13) |
| Frelinghuysen (R-NJ-11) |
Terry (R-NE-2) |
| Gerlach (R-PA-6) |
Thompson, M. (D-CA-1) |
| Giffords (D-AZ-8) |
Thornberry (R-TX-13) |
| Green, A. (D-TX-9) |
Tiberi (R-OH-12) |
| Hirono (D-HI-2) |
Tierney (D-MA-6) |
| Hoekstra (R-MI-2) |
Wamp (R-TN-3) |
| Jackson Lee (D-TX-18) |
Watson (D-CA-33) |
| Jackson, J. (D-IL-2) |
Welch (D-VT-AL) |
| Kilpatrick (D-MI-13) |
Woolsey (D-CA-6) |
| Knollenberg (R-MI-9) |
Wu (D-OR-1) |
| Kuhl (R-NY-29) |
Yarmuth (D-KY-3) |
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Democrats
Shelley Berkley (NV-01)
Emanuel Cleaver (MO-05)
John Lewis (GA-05)
Hilda Solis (CA-32)
Republican
Gresham Barrett (SC-03)
Howard Coble (NC-06)
Jim Gerlach (PA-06)
Tim Murphy (PA-18)
Jim Ramstad (MN-03)
Ileana Ros-Lehtinen (FL-18)
John Shadegg (AZ-03)
Lee Terry (NE-02)
Patrick Tiberi (OH-12)
Zach Wamp (TN-03)
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