> Why couldn't the administration have let some of the big banks, insurers,
> and auto companies fail - I'm not persuaded Armegeddon would have
> resulted
I'd argue we should resist the "failure-will-clear-the-system" argument, because it assumes there's some natural, market-centric equilibrium which corresponds to the greatest human happiness. The libertarians on ZeroHedge are a sharp bunch, but they talk about the Final Valuation the way the Far Left goes on about the Final Crisis.
Last year we had a Great-Depression-style panic which would have shut down the global trade and credit system completely. The US Government had to -- and did -- take over maybe a quarter of the US credit system (Fannie Mae and Freddie Mac renationalized, plus the TARP stakes in the major banks).
What we should criticize the Dems for: allowing GM to die and throwing US auto-workers out in the street, while letting the Vampire Squid (formerly known as Goldman Sachs) reinvent itself as the US Treasury Department. In short, bailouts aren't the problem - the problem is Wall Street's tentacle-wrap on US politics.
-- DRR