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In a free market economy, sheer ineptitude and recklessness are supposed to lead to financial ruin. By bailing out these firms by taking on their unwanted assets, the Bush Administration - and their enablers in Congress - are essentially sending the message that such behavior is not only acceptable - it is to be rewarded.

So much for fiscal conservatism.

Of course, that is not to say that there wouldn’t be unintended fall-out if these firms take the hit. While the talk of lending grinding to a halt is ridiculous (interest rates rising in order to mitigate additional risk and existing liabilities is not the same as ‘grinding to a halt’), people will of course be impacted. I will be impacted.

But, once you look past the current political season and into the long term, the impact of extending a safety net to the most foolish among the Wall Street elite will be much, much more costly - and likely just the first of many costly interventions by the Federal government. Once these sorts of things start, they never seem to go away.

I’m especially annoyed at the degree in which this is being railroaded through Congress by the Bush Administration, as well as the degree of politics being played by all involved - natural, considering that we’re in the latter stages of a hotly contested election season, but still incredibly unfortunate. No matter how urgent the situation is, taking on $700 billion dollars in debt - roughly the same amount we’ve spent on the Iraq war over the last five years - merits considerable discussion and review.

I will even go so far as to say that Congressional members should first go home and face their constituencies - looking them in the eye and addressing their concerns - so that they understand the full meaning behind and consequences of what they are about to do.

As an aside, I’m also none too happy with John McCain at the moment. Far be it from a sign of leadership, his request to suspend Friday’s debate with Barack Obama is a blatantly political move and a wrong one at that. There is nothing leader-like or Presidential in dodging what will likely be tough questions on his proposed economic policies and stance on this matter. This is precisely the time that we as voters need to know where our future President stands.

While I’m largely opposed to Obama’s policies on the economy and a number of other matters, at least he has the balls to stand up before the American public and let them be aired.

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