The more I read about the government's reaction to this crisis, the more I worry about what they'll do next.  First of all, there were a lot of very smart people who have been predicting issues like this for quite a while.  These are also the people who are now saying, we cannot afford a bailout, in both dollars and cents, as well as in moral capital.  The people who were wrong, and kept telling us everything was fine, are also the ones dictating the solution.

The solutions being proposed by the Fed are all premised on the very wrong, and very dangerous notion that somehow, if we do things right, we can actually avoid the pain of this crisis.  The stock market is going down (in the short term), so whallah... we'll ban short selling... which has the effect of causing a tiny bubble again as those who were buying long get favored over those who were correctly betting that certain companies were overvalued.  Of course, this has been shown to prolong market troubles.

Poor economic policies by all parties involved have caused this problem for all of us.  Democrats and Republican alike thought that they could create laws which could serve certain political goals that would get them money and votes, and that they could control the economy in the long run against it's better nature.  They were wrong.  They gambled with our futures for their own benefit, and lost.  Now, Secretary Paulson is going to go around hunting for debt to buy up.  And he doesn't want to be questioned while he does it.  At least during the S&L bailout, these buy outs occured during rather orderly bankrupcies.  There was not question about what debt was bad.  Now Paulson doesn't want to wait.  He'll decide what debt is good or bad.  Besides, what's a trillion dollars among friends?

The price has to be paid... either now... or more in the future.  Unfortunately, lawmakers are acting like any other gambler who loses big.  He goes crying to anyone who has money, so that he can make one big bet to make it all back.  The problem is, this gambler also owns guns.  He doesn't ask us for money... the government takes it from us.  People need to fail.  Those who made mistakes need to be bankrupted so that they can't make mistakes in the future... or if they do somehow manage to get capital together in the future, they'll be smarter with it.  Of course there will be ripples that all of us will feel.  But the pain needs to be concentrated to have the right effect, not diluted among all of us such that nobody learns a lesson.

The price has to paid now, or later.  There is no getting around that.  We have to feel the pain now, or later.  There is nothing the government can do to "fix this problem" that won't have us hurting sometime.  The government can only act to prolong the pain, and hurt us more in the future.