Why Conservatives Should Not Vote for Romney

I wanted to list the reasons why I believe people who believe in a conservative ideology should not support Romney in the coming election.

- Romney supports the bailouts of wall street in 2008.  Romney believe that bailing out large financial corporations that took huge risks and made fortunes for themselves should be given taxpayer money when those risks blew up.  A conservative believes in the free market, and one of the most important aspects of a free market is that companies that fail must be liquidated.  The liquidation process transfers assets from the incompetent to the competent.  It punishes those that make poor use of resources.  Bailouts create moral hazard where corporations take on more risk than they would otherwise and leads to an overall more unstable equilibrium.

- Romney supports the Federal Reserve.  Conservatives should believe in the free market and the free market says that the market should determine prices, not the government.  When the government sets prices, the result is either a surplus or a shortage.  The most important price in the economy is the interest rate.  The FED directly sets the short term interest rate through the Federal Funds Rate, and it can strongly influence the long term interest rate through purchasing treasury bonds.  Lowering the interest rate and printing money to buy bonds has two negative consequences.  First, it causes higher prices which hurt the poor the most.  Second, it causes the business cycle.  All of the newly printed money flows into the economy and distorts the structure of production, which will eventually need to be corrected in a future recession.