Liberty Maven

Vern McKinley made an attempt to unseat Congressman Frank Wolf in Virginia’s 10th District in 2008. McKinley’s no nonsense limited government and free market approach to the issues intrigued me enough to vote for him in the primary. He lost convincingly which was not that surprising given Wolf’s 28+ year tenure as the district’s representative.

McKinley has done policy analysis for the CATO institute in the past and a new analysis he and co-author Gary Gegenheimer collaborated on was recently released by CATO.

“Bright Lines and Bailouts: To Bail or Not To Bail, That is The Question” covers the history of bailouts and aside from being an excellent analysis it is also extremely educational for those of us who lack an economics degree.

Here is an excerpt:

This present crisis has demonstrated that undertaking bailouts of troubled institutions, which involves structuring transactions that attempt to transform the institution into a viable one, while simultaneously projecting the reaction of investors and markets, is a process for which government is ill-suited. These bailout powers should be revoked. Financial angst still hangs over the system as the underlying imbalances that led to the crisis have not been reconciled. The ultimate answer is to place troubled institutions into receivership or the relevant form of bankruptcy—including many of the institutions that have already been bailed out.

The entire analysis is available here at the CATO institute.

For more from McKinley check out the interview with him we did during his Congressional primary campaign to unseat Wolf.