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The President Last Night

Thursday, 25 Sep 2008 | 10:00 AM ET

I thought he was pretty good. Kinda gave us some economic history about the mortgage credit collapse. Might have said a bit more on the taxpayers making good money as the mortgage loans are auctioned off and then worked out profitably.

Someone's gonna buy the paper at 25 cents on the dollar, work it out, ride the economy and housing recovery up, then sell the paper for a handsome profit.

Most of that profit will go to the government, aka the taxpayer. Ironically, this huge government action will be solved by free-market auctions and private sector loan workouts that will pay us back. I don't like it, but sometimes you just have to stop the financial fear. When I spoke to Alexander Hamilton last night about this, he told me it was the right thing to do. Like he did in the 1790s.

Anyway, I think President Bush moved the ball forward tonight, and I expect a bi-partisan solution in the next day or two. Without pay limits for auction buyers and sellers, and without government ownership of buyers and sellers; no Soviet-style confiscation. All in all, looks like a good time to buy the depressed stock market. Spells more credit and better growth next year, that is, if we don't hike taxes and put up protectionist trade barriers.

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  • Lawrence Kudlow is a CNBC senior contributor. Previously, Kudlow was anchor of CNBC's prime-time program "The Kudlow Report"