Baby, bath water II

Similiar to Rich Lowry’s message below, the editors of National Review (Lowry is one of them) recommend that Congressional conservatives swallow some free market pride and concede that offering some government solution doesn’t make them all a bunch of Chavez Socialists. In short, don’t throw out the baby (the economy) with the bath water (the distasteful pieces of the bailout).

There are alternatives to the Paulson plan, some of which are better or worse from a free-market perspective. But all of them involve major government action because in a financial crisis like this  — originally stoked by misbegotten government policies — only the government has enough capital to backstop the system. It is the nature of financial panics to destroy institutions and wealth willy-nilly. Insisting only on private action in a crisis this large is like counting on private emergency response to a hurricane or on a private military to fight the country’s wars.