who apparently can't get by in the free market without the help of the government.

Ouch! LOL

A well deserved low blow.

Progressives are crying bloody murder over this.

No one is listening.

Yep...I am screaming my fool head off workerbee and all that is happening is I am getting hoarse. Very few listen and the ones that do accuse me, and my kind, of possibly being repug/conservative trolls who are trying to damage/sabotage the Democratic Party. Goes to show you where the party is when George Will can be seen as someone who can take positions more "liberal" than some self described liberals.

I eagerly await the taunts and having the name McGovern thrown in my face as an ad hominem by all the DLC's "real" liberals.

Exxon/Mobil et al post $128,000,000,000 in profits but still need $18,000,000,000 in "welfare" money from us taxpayers...

ABSOLUTELY! Thank you Dean!

I have a harder time thanking Mr. Will.

There is no outrage about anything the government does anymore. America has effectively tuned out and/or given up. Yoo doesn't even register, the Generals/MSM propaganda machine story doesn't get any footing and this fiasco is a non-story but America is up in arms that there was an American Idol upset boot...

Good point!! The same thing happened in 1929 but they knew then how to deal with fat cat executives! That bank in Cleveland failed and the government decided that there should be no bail-out. And then another bank failed. And then there was a run on the banks. And then...oh well...but the populist purity of refusing to interfere with the draconian vengeance of markets was preserved.

The Fed is under the illusion that what matters is whether the financial system continues to function. What matters is whether we grind the face of those executives into the mud!!! Who cares if the financial system fails. We survived the last depression and it produced some pretty good songs and not a few pretty good novels.

The proposal is that, in order to get government assistance, the executives have to accept a salary cap. Which means, the executives decide whether or not the financial system of the country is sufficiently at risk to require government intervention. Nah! That decision should be made in a general election. That way we could get a little political pandering into the debate. And pandering is always good for a laugh.

Why aren't progressives screaming bloody murder over this?

Because we have bigger things to worry about, like actual bloody deaths in iraq, for one. In theory the government may make a profit off all of this in the end, and while I agree it creates a Moral Hazard, letting these institutions fail could also cause a ton of problems due to the fact that there is so much interconnectedness in the markets and if Bear Sterns, for example, went under a bunch of other banks would panic, even if their positions really were sound.

Also, at $2 a share, the B.S. thing wasn't really a "bailout" because the stockholders of the company would have been wiped out. That got raised to $10 a share, but the extra money was payed by J.P Morgan.

Was it stupidity on the part of the investment banking elites, or theft? Wouldn't restitution and jail time be the fair way to go on this? The crooked game they ran wasn't sustainable, but still they get to walk away with their take - and they don't get lynched because the taxpayers pay off those they stole from.

So were they just too stupid to realize they were running a rigged game? Would this be a acceptable as an excuse by a Las Vegas dealer, that he was just too stupid to know he shouldn't be sometimes dealing from the bottom of the deck?

Actually, this is not a giant leap to the left. George Will's position that the Fed should not act as a welfare policy for bankers is consistent with conservative policies.

It is the bankers themselves who have taken a giant leap to the left in demanding the Fed and government bail them out.

The Fed's mission is to preserve the currency as a store of value by preventing inflation. George Will

Here, Will is being purposefully(?) dense. The Fed's mission is many-fold and includes maximizing employment, moderating interest rates, and maintaining the strength of the banking system in addition to (along with might be a better term) protecting the "value" of the dollar.

The question is whether the Fed's recent actions seeking to avert "banking panics" is judicious, that is, balanced in respect to its performance of its other mandates.

George Will, as hide-bound conservatives never do, has failed to address let alone answer that question.

Could it be that the 'progressives' really are more afraid of the economy collapsing and ruining their own lives, while the liberals like Baker screaming the most have secure jobs and incomes?

Tough call. The posters on either side here have good points. Letting the investment banks strangle on their own worthless paper would be a gratifying sight, but would it likely bring about another Great Depression?

Trouble is, last time it took the Great Depression to bring the bankers to heel, to raise a Roosevelt to the presidency and to initiate the New Deal. Another depression would suck massively, but if that is it takes to clear the brush in order to rebuild a solid financial system...

I fear that there are holes in my knowledge of history. Wasn't the banker's cartel controlling the money supply (you know it as the Federal Reserve) established before the crash of '29? And if so, why did the Ben Bernanke of the day let his fellow bankers jump off of roofs instead of bailing them out? Hoover, rightly, got the blame for failing to act against the crisis, but I gotta wonder, did he really have the power to do much about the crash?

It would be tragic to need a depression to wipe that smirk off of Robert Rubin's face, but does anyone have a less painful tool to wield?

I wouldn't go overboard celebrating a Will column.

The Fed's mission creep has occurred in large part at the expense of the SEC, another creation of Congress. So there isn't really more regulation, rather a case of an annexation of regulatory turf by the Fed.

On the Bear "bail-out"... please let's call it what it is, a take-over subsidy for the benefit of JPMorgan (in the form of loss-protection insurance). Here's where Will loses the thread:

The purpose of the money was to give Morgan an incentive to buy Bear -- at a price so low that an incentive should have been superfluous.

This is misleading. JPM would not have bought Bear without the subsidy. Simple. The larger the subsidy, the more JPM would have been willing stump up. Without any sudsidy, the Fed would have had to pay JPM (or someone else) to buy Bear. It was a zero sum game; argue all you want about the ethics of the deal, but the objective was to ensure Bear did not collapse, and that's what the Fed delivered.

Another Will assertion:

Today's argument is that Bear Stearns was so connected to the financial system in opaque ways that no one could guess the radiating consequences of its failure

Not so much. Bear's connectedness came out of the trillions of dollars worth of derivative contracts it was a counterparty to. There's nothing really opaque about this, at least not to anyone in the industry. And whilst no-one could put a $ estimate on the cost of Bear's collapse, the consequences would have been huge. Trillions of dollars of counterparty-less derivative trades would have ensured that.

But here's the big omission. Will says nothing about who in government signed off on the Bear deal. Maybe he doesn't know, I don't expect many do. But if he's in a huff about oversight of the Fed, he might start asking who approved the most high-profile Fed intervention in living memory, because it sure as heck wasn't the Chairman flying solo.

And, finally, this is funny:

The Fed's mission is to preserve the currency as a store of value by preventing inflation. [...]The Fed should not try to produce this or that rate of economic growth or unemployment.

Except the Federal Reserve Act says the goal of monetary policy is:

“...to promote effectively the goals of maximum
employment, stable prices, and moderate long-term interest rates."

Shorter George Will:

THE FED MUST ONLY DO WHAT THE LAW* REQUIRES IT TO DO.

*I AM THE LAW.

I have been screaming! I've been writing emails to members of Congress - like Senator Dodd who says he is sympathetic to consumers, but instead takes millions $$$ from Banks, and Bear Stearns specifically. Tell me that did not influence the big bail out.

Taxpayer dollars should not be bailing out Investment firm gamblers!!

So we bail out the irresponsible big banks and investors - but I didn't see Senator Dodd with Senator Carl Levin to champion consumer rights at the hearing about the Credit Cardholders Bill of Rights. Why do consumers have to be penalized with 15, 20 or 29% interest rates? Why not helping people faced with losing their home because of criminal lenders. The Home Builders do not need the tax breaks - consumers do!

And where is the transparency on this shady Bail Out - and we know it is a shady deal because it would have been illegal for the Fed to directly bail out Bear Stearns.

We need Public Campaign Financing!!! So we can tell some members of Congress and their Corporate friends to take a hike!

I second this post.

But for "stupidity" I would substitute "greed, recklessness and stupidity."

Dean, progressives aren’t screaming because Bear Stearns and the investment banks are not (at the present) getting a gift of money. They are borrowing it, and that is different – the Fed is allowing investment banks to borrow at the discount window, which means they have to pay it back the next day.

When normal banks do this, the Fed requires them to hold more cash in reserve, and fix themselves – find new money or else. So what strings are attached? They’d better be more like cables! We ought to be hollering about this.

It’s baffling that George Will doesn’t seem to support the bailout or understand the core choice, as several others have pointed out here. The Fed was the only entity that could act, and it wisely removed a few dominoes out of the way of a run on investment banks, which would lead to a run on their clients - normal banks, mutual funds and pension funds, to name a few. This is conjecture, of course.

But would George Will or Dean have cried foul if the Fed was around to bail out the banks in 1929? Maybe we feel like we got our collective wallet stolen, but the thief only got some cash and pictures. We’ve still got the house, the car, and the job – for now.

So progressives shouldn’t be screaming. We should be voting. And if our candidates aren’t discussing sensible executive compensation, increased regulation, examinations, (there’s very little in investment banking), and possible penalties for companies with demonstrable short-term myopia as well as the current economy, we should be lining up for a better legislator or executor.

In the meantime, let’s be grateful it’s not a soup and bread line like 1929. We’ve still got a gas giant that needs deflation, but the Fed kept it from sucking the life out of our economic solar system.

Please, this is really stupid. Must progressives have idiotic knee-jerk reactions just like the right wing? It's hardly a 'bailout.' Bear Stearns shareholders got $2 a share from JP Morgan (later raised to $10 a share, after negotiations), for their stock that had been something like $160 a share less than a year earlier. And the government didn't pay a dime of that. 40% of the shares were owned by employees, most of whom are liable to lose their jobs, too. And a lot of the rest was spread around in our pension plans.

This was a classic run on the bank, just like in the Great Depression. If the Feds had let Bear Stearns go into bankruptcy, our entire financial system would have gone into freefall, with one bank collapsing after another. Do you honestly think that would have affected only fat-cats? Yeah, like the Great Depression didn't harm anybody but the wealthy, huh? The Fed had to guarantee some loans because no one knows how much they're really worth in this financial climate. It wasn't a matter of them being worthless, but of not knowing their value. If the Fed hadn't done this, credit would have completely frozen up, because no bank would have known what anything was worth. And that would have severely damaged ALL of us.

This was a superb move by the Fed, a bold move that prevented a huge crisis (at least, for now) brought on by the idiocy of the Bush administration and their extreme anti-regulatory fervor. The fact that you're agreeing with George Will should tell you that you haven't been thinking this through. This wasn't a 'bailout,' this was an intervention to keep the whole system from crashing down on our heads.

Try to keep a little common sense, please! Knee-jerk reactions are just as foolish coming from the left as when they come from the right. We should be smarter than that!