Udall votes no on $700 billion bailout, should now support suspension of Mark to Market accounting
September 30, 2008 —
The mess on Wall Street must be stopped before it reaches Vail’s Bridge Street. Government interference is, unfortunately, our only option.
Yes, something must be done, but America dodged a bullet when people like House Rep. Mark Udall (D), who represents our district and is up for election to the U.S. Senate this November, voted no on the $700 billion bail-out on Sept. 29. The trend toward free-market economy which began under Reagan has been generally successful – to undo the work of more than 20 years in a single day is unwise and fundamentally un-American.
Udall told Tom Brokaw that calls into his office were, “mixed between people who say no and people who say hell no,” on the Sept. 28 edition of NBC’s Meet the Press. “This shouldn’t be welfare for CEOs,” Udall said.
Udall would be wise to go one step further and recommend the suspension of so-called “Mark-to-Market” accounting. Simply put, Mark to Market (also known as FAS 157) requires that banks and other financial institutions assign a value to an asset equivalent to the market price for that asset. That’s all fine and good until there’s no market for an asset, and financial institutions are required to mark that asset as worth zero.
I agree with Newt Gingrich, who says Mark to Market is the cause of about 70 percent of the current crisis, and has been berating the Treasury Department with calls to suspend FAS 157, which is within its power.
Suspending Mark to Market is a step that can be taken right now to ensure that all those many investors and CEOs who love to vacation in our town can feel comfortable about booking their winter vacation.
It's not a catch-all solution, but it's the first in several steps which can ensure that the mess on Wall Street doesn’t spill over onto Bridge Street.
Comment on "Udall votes no on $700 billion bailout, should now support suspension of Mark to Market accounting" using the form below