These days it can seem more popular to defend Morris dancing than free markets. In today’s recession-engulfed debate, failed ideas have come back from the dead. Capitalism is bad, intervention good. Financiers are evil, industrialists are good. Tax hikes are good, low-tax polices are bad. And so on.
But if there is one person (beside Fraser Nelson, of course) who is willing to stand up for free-market capitalism it is Steve Forbes. The U.S publisher, flat-taxer and perennial presidential candidate has just published a punchy piece in his eponymous magazine – entitled “How Capitalism Will Save US” — and at a breakfast meeting in London, he laid out his ideas.
Forbes believes that U.S regulators should change the “mark-to-market” accounting regulations, which require daily revaluing of assets. This piece of regulation more than any other, Forbes believes, aggravated the financial crisis because it require bankers to put mortgage assets on their balance sheets at current prices, even though they might plan to keep the securities for years.
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