A libertarian in a foxhole

What's going on now on Wall Street is a mess. Firms will fail. It will have a negative effect on the economy. You know what? So what. Capitalism without failure can't work. Whatever problems there are with welfare for the poor, they are much worse for welfare for the rich. Bailing out firms will only make the next crisis even worse, as people rationally conclude that they can take excessively huge risks and have the government bail them out if they fail. If the JP Morgan purchase of Bear Stearns was done without guarantees from the Fed or any other government organization, I'd say good for them, buying illiquid but valuable assets cheaply is smart. If the Fed were a profit-maximizing, truly private, organization, whether they essentially guaranteed JPM against losses for profit or for altruistic reasons wouldn't much concern me. A little, but not much. When the government does what it did, it only delays (and increases) the problems. We are seeing an acceleration in the rate of inflation, and the Fed has to shoulder much of the blame. Perhaps not all of it, but the lion's share, and recent actions are only going to continue that trend. And, yes, inflation is a negative for standards of living. I'm still skeptical of the deep recession story, but avoiding a recession completely seems increasingly unlikely. Most likely, we are already in one now. Perhaps some leaning in the wind, as they say, is called for, but this is ridiculous. Sorry if I've ranted too much, but I want to get this on record now.