You might think that four months into a four-year presidency wouldn't be enough time to determine whether someone is a success or a failure. But according to Newt Gingrich, you'd be wrong. Speaking before 2,000 Republicans at a fund raiser last night, Gingrich said that "Bureaucrats managing companies does not work, politicians dominating the economy does not work."

Because President Obama has taken steps that bank on an economic recovery through the government ownership and at least to some extent, management, of companies, Gingrich said that his economic recovery plan has "already failed."

As more details were unveiled yesterday about the Public-Private Partnership proposed by Secretary Timothy Geithner to deal with the "Toxic Assets" currently on the balance sheets of many of the major banks, the equity markets around the world experience what can only be described as euphoria. Equity markets in the United States experienced one of the biggest one-day rallies in history. Obviously, Wall Street likes the plan at first glance.

However, Paul Krugman, the liberal Noble Prize winner, wrote an editorial in The New York Times attacking the plan as "Cash for Trash." Subsequently, Newt Gingrich, the former Republican Speaker of the House, announced on Fox News that he agreed with Professor Krugman. When senior figures on both left and right agree, it may be wise to look past the euphoria.

Newt Gingrich has gone on the record with a solution to the crisis that is the best I have seen so far. Rather than pass a $700 billion bailout, suspend the accounting rules that are causing the liquidity crisis to begin with.

In the past few years, accounting rules changed and these changes are in part causing the current crisis. Specifically, the problem is mark-to-market accounting where all assets are required to be valued at current market prices. If the market is temporarily depressed, it can cause an artificial crisis.

Let me give a silly but simple illustration. If you have 20 one dollar bills in your wallet, we would all agree you have a net worth of $20. Thirsty Bob also has one dollar bill in his wallet and walks into the break room and wants to buy a Coke. Soda in the machine costs 50 cents, but it only takes quarters. Thirsty Bob asks if anyone has change and they all say no. Sam says he has only two quarters and will trade Thirsty Bob -- who is really thirsty -- two quarters for a dollar. Thirsty Bob quickly agrees to take Sam up one his offer in order to get the Coke now. Bob knows that two quarters for a dollar is a bad deal, but he is takes the deal anyway.