If I were the economic czar of America, I'd pull a Marie Antoinette and tell Wall Street and other irresponsible and insolvent banks to make lemonade out of lemons or die a slow death by maintaining the status quo of stale bread and water. Wait, that analogy doesn't even hold because I believe it was the French government that gave them the stale bread to begin with. Perhaps the stale bread we gave Wall Street were the high corporate tax rates and regulations that impede their ability to thrive and survive. Regardless, I'd tell them to deal.
I've
complained before about Americans coddling children to the point that they don't recognize or accept failure and thus responsibility as adults. Apparently this applies on the macro level as well.
"Let Wall Street Fail" is a quick, insightful explanation of how Bernanke and Geithner (i.e. the government) are blowing it big time.
The market is light years ahead of the government problem-solvers in sorting out this mess.
The market knows what to do. Yes, that's anthropomorphizing an intangible entity, but wrap your head around it boys and girls. There's no way to aggregate enough timely and relevant information for the government to make the best buying and selling, hiring and firing, liquidating and investing decisions. This seems so fundamental that I feel like I'm banging my head against the wall. And why does no one seem to care that the stock market dips every time there is news of a bailout!? No, it's not because the bailout/buyout/stimulus isn't big enough - it's because investors DON"T LIKE THE BAILOUT! Why the media seems to blithely ignore the markets dips in conjunction with bailout news is beyond me. If I was more savvy with technology, I would try to track that and write one kickass policy brief on the media's negligent and biased oversight.