Limited Government Leads to Economic Growth

Mr. George Melloan retired in 2006 after a 54-year writing and editing career at The Wall Street Journal, where he was a key member of the Journal’s editorial-page staff during the 1970s. He has also written the book, The Great Money Binge, in which he makes the case that less regulation is needed to promote economic growth.

In The Great Money Binge, Mr. Melloan blames mark-to-market accounting rules required by the Financial Accounting Standards Board in 2007 for adding gasoline to the fire of the financial crisis.

Mr. Melloan says that requiring companies to adjust their books every time an asset changed value resulted in showing paper losses that had a cascading effect. Companies were forced to sell assets that they had intended to hold and thereby lowered prices further.

“Since uncertainty had locked up the market for [mortgage-backed securities], the mark-to-market rule exacerbated the problem. How do you mark something to market if there is no market?”

The Great Money Binge is published by Threshold Editions.

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