"It Is Quite a Punt"

Always good for us rah rah capitalism types to keep in mind that sweeping out the dusty corners of private enterprise will reveal just as many dunces as when one does the same thing in government. From today's Telegraph:

Were it not so serious, the role reversal would be hilarious. For years, US governments have called in titans of finance for advice on how to run federal affairs more effectively. Now, those clever clogs who were once deemed to have all the answers are asking difficult questions, like: "May we have some help, please, we appear to have burned through our shareholders' reserves?"

But as that other noble Brit, Douglas Adams, would remind us: Don't Panic. It seems as if the world is ending, and it may be. But keep your cool, because everything is going according to plan.

As a former Goldman Sachs executive, Paulson understands that the unravelling of Lehman is not a sign, per se, that free markets are failing. Quite the reverse. They work best when driving out weak and inefficient operators. Creation and destruction are part of the game. Nobody said that capitalism was devised to provide soft landings for hopeless losers. Sending a message that all sinners will be saved only encourages reckless behaviour.