What a week.? I got whupped the last two days of the week, and am behind the S&P 500 by less than a percent for the month to date.? The moves of my portfolio relative to the S&P 500 have been unpredictably large compared to past experience.? I am down a little year to date.

My one brief note for the night is to say that there are libertarians, even in financial crises.? I am one.? To the degree that I recommend bailouts, they are painful, and meant to end the current government subsidy of the institutions.

After that, I will mention my acquaintance Caroline Baum, who favorably cites Jim Bunning.? He is one of the few, along with Ron Paul, who will uncover the follies of our monetary policies. Then I will mention George Schultz, who says we should avoid intervention in the GSEs (Fannie and Freddie).? He advocates that our government should be concerned with what it does not do — this is very out of step with the American psyche — action is always preferred to inaction, as opposed to the Hippocritean “First do no harm.”

Finally, I will mention Roger Lowenstein.? He is right; failure is a necessary part of capitalism.? Fascists (Crony Capitalists) and Socialists will protect favored industries, but failure gives important signals to all economic actors — what to avoid.

In one sense this is an essay on the short run versus the long run.? Our current economic policy is short-term laser-focused.? The “right” decisions to promote short-term prosperity reduce the prospects of long-term proserity.? A certain amount of fear of failure promotes long-term carefulness and prosperity.

We learned the wrong lessons from the Great Depression.? Yes, there will be instability in capitalist economies, and it can be severe.? But government action exacerbates that instability more often than not.? It is better to live with the occasional small crisis, than to have huge crises come because the monetary and fiscal authorities were too lenient.