Conservative Donnybrook

Rep. Thad McCotter of Michigan has unveiled a new plan that he’s pushing as an alternative to the Paulson bailout, it’s based on pushing firms through expedited recapitalization proceedings, relieving distressed homeowners, and limiting the size of financial firms to prevent “too big to fail.”

I attended a lecture by McCotter a couple of days ago, my account of that is here. He had thoughtful comments on the imbalances in our economy and financial system that lead to the crisis. He also expressed his approval of a plan from Chicago prof Luigi Zingales that has gotten some attention, and which seems to have influenced McCotter’s own proposal.

And what do I think? Well, the McCotter proposal is called the EARN Act for Expedited American Recapitalization-Now. I can’t stand cutesy acronyms–rename it! Otherwise, it’s lookin’ good. I’m trying to avoid exhibiting Male Answer Syndrome by opining too much about the financial crisis, about which my level of knowledge and insight is just about zero. But it seems clear enough that the Paulson plan rewards the wrong people and behavior, and I hope that McCotter’s plan generates the discussion it deserves.