Tuesday, September 23, 2008

McCain Gets Closer

As I noted in the last post, McCain's various statements about the credit crisis or the economy in general are less than inspiring. However, he's getting closer to where he needs to be with today's statement.

The problem is complex, and the legislation to fix it surely will be as well. So first, let's state some principles we can use to guide us instead of barking barely coherent complaints against various bogeymen, some innocent and some guilty.

I would have stated the guiding principles a little differently. Whether we characterize what eventually gets done as a bailout or not, there will eventually be some kind of intervention, because there is a very substantial likelihood that we would have a second Great Depression without one. But the money is so huge, and the amount of government control over the economy is so extraordinary, that we have to emphasize that the intervention is something we have to do, not something we want to do. And, this is something we only intend to do once, with provisions for sunsetting and reselling debt back into the private market when the opportunity arises.

But truth be told, what's in the statement isn't too bad for now. Everything going forward has to emphasize two things. First, let's do X, Y, and Z and we'll avoid the 1932-scenario. Second, after the crisis is past, we'll remain vigilant against government mission creep. We're not going to maintain intrusive government power past the point where it's needed.

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