Humbled in crisis

A year since the meltdown of world financial markets and the bleeding appears to have been staunched, but still there is no agreement on the proper reaction to and path out of the crisis. For proponents of the free market, governments did the wrong thing by throwing money at the problem — instead, mismanaged companies should have been allowed to sink. This would have saved the phenomenal expenditure of funds that will impose a heavy burden on taxpayers for years to come, while resolving few of the structural problems in the rescued companies. Defenders of government intervention, in turn, say there was simply no way to allow large companies to fall. This would have undermined all confidence in both the markets and in the role of government. It was better to save the companies and later reform them than to preside over the disintegration of interconnected markets. In retrospect, neither