A couple months ago we revealed the lawsuit former VA congressional candidate Vern McKinley brought against the Federal Reserve and FDIC because the organizations were less than forthcoming in responding to FOIA requests.
Ron Paul has HR1207 and over 267 cosponsors. The Senate has S604 and 8 cosponsors. Demanding Federal Reserve transparency is coming from all sides. Vern McKinley, who ran unsuccessfully against Frank Wolf in the 2008 10th district of Virginia’s GOP primary, has been fighting for transparency over the last several months using the law.
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.
Vern McKinley, at Cato.org, suggests that all the so called “tools” in the recently passed bailout legislation have implications all liberty seeking free marketeers should be concerned about. He steps through some of the more talked about provisions in the rescue legislation and examines what their implications are in the real world.
…a primary source for depositor fears has been their effort to acquire a number of what they have called “tools” to address the crisis, including the power to make up to $700 billion of asset purchases. The tools that Paulson and Bernanke have sought have had one characteristic in common: a lack of confidence in markets to resolve the imbalances caused by government policy in the financial markets. In overpromising the soothing effects of one tool, Paulson and Bernanke have then moved on to securing the next tool.
McKinley looks at the implications of other tools such as raising the FDIC insurance limit, the allowance for the FDIC to borrow unlimited funds from the Treasury, and Treasury injecting capital into the banks. He concludes with what we’ve learned from the bailout fiasco.
The big lesson here is that making major legislative changes in times of crisis leads to bad policy (recent examples in the financial sector are the Patriot Act and Sarbanes-Oxley). These “tools” are a euphemism for extraordinary powers that would not be considered in a calm market. They are largely preemptive, and aimed at avoiding bank failures.
I couldn’t agree more. Vern McKinley lives in my district and ran against the incumbent big spending Congressman Frank Wolf in the GOP primary earlier this year. McKinley didn’t win, unfortunately. If he were representing me in Congress during the bailout debate I wouldn’t have had to send emails and make phone calls to him pleading to vote against it. I would have already known that his vote would be an emphatic “NO”, unlike my current so called representative.
As the bailouts continue, I urge the Reader to remember the republicans who gave warning decades ago. One is Dr. Paul, another is the “First Ron Paul Republican” Vern McKinley.
by Jake, the Champion of the Constitution Originally published September 29, 2008 at http://www.nolanchart.com/article5048.html
I recently came across a summary article (full version with sources here) from Vern McKinley on Freddie Mac and Fannie Mae published for the Cato Institute where he warned of its threat to the taxpayer in 1997.
“Although Freddie and Fannie are privately owned, they are what is known as government-sponsored enterprises (GSEs). GSEs don’t have to follow all the rules that true privately owned companies do: they don’t have to register their securities with the government, their securities receive special treatment for investment purposes, they don’t have to pay state and local income taxes and–most important–their government sponsorship gives them the aura of a fully guaranteed government entity. That final benefit means they save billions in borrowing costs, just as lenders are willing to offer low-interest student loans that are guaranteed by the government. That savings alone allows the GSEs to pocket about $2 billion per year, according to estimates by the Congressional Budget Office and the Treasury Department.”
“Allowing Congress to grant such special privileges is a bad idea. Those privileges, which are granted solely to Freddie and Fannie, crowd out other potential competitors in their market. Privately owned companies should not receive such preferred borrowing status, because it redirects investor funds into the middle- and upper-income housing market at the expense of other potential investments. Finally, the failure of either Freddie or Fannie could saddle taxpayers with a huge liability.”
“Congress should immediately revoke all the benefits of government sponsorship: clearly, Freddie and Fannie can be profitable without them. Eliminating special privileges will force mortgage markets to be truly competitive and will eliminate the possibility that the current system of government sponsorship will someday lead to yet another taxpayer-funded bailout.”
Vern also warned that these millions of dollar of savings were recycled into a “high-powered public relations and lobbying machine.” The GSEs also evenly supporting both Democrats and Republicans with $750 million in the latest contemporary election cycle at the time of his article. The article was published in 1998 in USA Today with the title “Privatize Fannie Mae and Freddie Mac.”
The two libery loving Republicans have been defeated in their respective primaries today. Amit Singh almost pulled it out, but his opponent pulled away at the end as the final votes in Fairfax County were counted.
Vern McKinley was up against a juggernaut in 28 year incumbent Frank Wolf so his landslide loss was not surprising. At least Vern had the guts to go up against this neo-conservative big government Republican and give true Reagan principled conservatives a voice in the election.
Vern and Amit are heroes of liberty and heroes of liberty are heroes of mine. Thank you both so much for the sacrifices you’ve made to give Virginia voters a true limited government choice.
Today is primary day in Virginia’s 8th and 10th congressional districts, which means it is time once again to vote for limited government, freedom, prosperity, and liberty. I will be working the polls for Vern McKinley today along with several other grassroots supporters. I’ve called all my friends in the 8th district and made sure they will get out and vote for Amit Singh today. I have put out about 50 McKinley signs around my area of the district. I walked my neighborhood and passed out palm cards. All of this may not be enough to unseat the 28 year incumbent, but it sure feels good to be a part of it.
So if you happen to be reading this and live in either the 8th or 10th district in Virginia. Get out and vote for Vern and Amit. I’ll write again once all the votes are counted tomorrow night.
Vern McKinley is challenging incumbent Frank Wolf in a Republican primary next Tuesday, June 10th in Virginia’s 10th congressional district. I live in this district and have heard some seriously scary things about Frank Wolf. I will not repeat them because I have no proof, instead I will try to focus on the issues where he and Mr. McKinley differ.
Vern McKinley is a principled Reagan Republican. I’m talking about the Reagan running for office, not the Reagan who forgot about cutting spending as well as cutting taxes. I suppose his Congress could be blamed for that. Frank Wolf used to be a Reagan Republican. He even ran supporting term limits in 1980. Almost 28 years have passed and he is still in office. Wolf, from the very beginning couldn’t keep a campaign promise.
On to the issues. If an issue is not listed it means that both McKinley and Wolf generally agree on the issue with a bit of room for differences in the margins. The point is to show where the candidates truly have a different world view.
Earmarks (AKA “bringing home the bacon”): Wolf likes to tout his SAFE commission, which is yet another Wolf investigative committee like he has proposed so many times in the past without much to show for it. The idea is to “examine” earmarking and figure out methods to curb it. This, in my view, is an establishment politician trying to have his cake and eat it too. It looks good on paper, but why did Wolf propose and get over $200 million in federal money in earmarks last year? Just another sly Wolf-like move, I guess. I hope people are paying attention this time.
McKinley on the other hand is almost running his entire campaign on “earmark” reform. He rightly criticizes Wolf on earmarks, saying that states shouldn’t use the federal government as an ATM machine. Funds for local projects should be raised locally. There’s some true federalism for ya. Bravo Vern.
Grades: Wolf gets an ‘F’ for being a shyster. McKinley gets an ‘A’.
At Reason Magazine headquarters yesterday four candidates who can potentially carry the Ron Paul message onward sat down for a debate. All participants except for one are Libertarian Presidential candidates. The exception was Vern McKinley, who is running for Congress in Virginia’s 10th District against Frank Wolf.
What was interesting to me as evidenced in the embedded video (thanks to Reason.tv) below is that Vern McKinley almost sounds more libertarian than some of the Libertarian candidates, most notably, Wayne Allyn Root. Check out the video below and realize it is time to figure out who you are going to support in the general election for President in lieu of Ron Paul. Writing in Ron Paul may make you feel good, but it will go nowhere. At least in Vern McKinley’s case you know you can support him as a “Ron Paul Republican”.
Awhile ago I signed up for Rep. Frank Wolf’s (10th District VA) email newsletter. I used to support this guy. Today I received an email that perfectly represents why I no longer support him. As a libertarian leaning conservative I take offense to more government spending. When the government spends what it doesn’t have, as it has been doing for many years now we suffer. It is this kind of behavior that helped give us the economic calamity we are now facing.
Frank Wolf is trying to have his cake and eat it too. In the very same email he advocates cutting spending and using those cuts for more spending. He, like many other elected officials, is trying to gain support for the projects he feels are most important. He advocates moving money from one area in to another, rather than actually cutting spending. It’s obvious to this 10th district voter he doesn’t really care about curbing spending overall. He puts a few good key words in this statement but in the end he’s not really advocating cutting anything. Here is the relevant quote:
Although we have been successful in raising awareness of the need for a strong STEM workforce and in authorizing innovative programs, we now face a serious challenge in funding these initiatives. As you will read, I believe that we must rein in explosive mandatory spending in order to ensure sufficient funding is available for this critical competitiveness initiative, among other programs. (Source: Wolf Email)
I don’t care how “good” the programs may or may not be. The point is Congressman Wolf is NOT interested in cutting spending. He’s only interested in continuing the budgeting shell game of typical establishment DC politicians. We need to replace him with someone with a fresh perspective on spending and government programs. Someone who will actually practice what he preaches. That person is Vern McKinley who is challenging him in the Republican Primary on June 10th in Virginia’s 10th District.
Liberty Maven
“Although Freddie and Fannie are privately owned, they are what is known as government-sponsored enterprises (GSEs). GSEs don’t have to follow all the rules that true privately owned companies do: they don’t have to register their securities with the government, their securities receive special treatment for investment purposes, they don’t have to pay state and local income taxes and–most important–their government sponsorship gives them the aura of a fully guaranteed government entity. That final benefit means they save billions in borrowing costs, just as lenders are willing to offer low-interest student loans that are guaranteed by the government. That savings alone allows the GSEs to pocket about $2 billion per year, according to estimates by the Congressional Budget Office and the Treasury Department.”
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