Fascinating History Of Mark-to-Market Accounting Rules

Untouchable Accounting Rules? Really? by Brian Wesbury on NRO Financial: "Fair-value accounting as we know it today is based on rule FAS 157, which was implemented by the FASB in 2007. But it has a longer history than that. Fair-value accounting existed in the 1930s, which was when we had the Great Depression. In 1938, President Roosevelt suspended those rules, and between then and 2007 the economy had no panics or depressions. Maybe its time we put fair value through the shredder once again."

This is a great column on mark-to-market, the accounting rule that helped shift the financial liquidity collapse into overdrive.

Reforming this rule was an obvious first move in dealing with the crisis. It's shocking that nothing has been done about this. But then again, why would we be surprised? Elimination of mark-to-market could ameliorate the liquidity crisis, but the Big Government types in Washington wouldn't get any goodies in return. When they dole out federal funds to banks, they get to start calling all the shots.