The fear that the world as we have known it will end if it is not for government bailouts (a.k.a. "welfare for the rich") is ridiculous, even if we assume the very worst. Under the assumption of the very worst, so to speak, it is especially essential and vital that the market allow the failures to take place and to then allow the market to readjust to reality.
That the government, its left-neocon bodyguards, and those who are at the receiving end of the bailouts paint such a picture should not be surprising. All that needs to explain this is that they gain at the expense of the public at large by painting this "world-is-going-to-end" picture.
However, as great economists like Murray Rothbard have shown, by not allowing the market to readjust to reality, which requires a non-interventionist governmental policy, it will take that much longer for reality to set in. The economic crisis will thus be deeper and longer than it otherwise would be if the current statist ideas succeed. Trying to hold together this bubble (which was created by the government) or, worse, trying to inflate it to a larger size is going to only delay the inevitable. It will make that inevitable result only worse. Therefore if one was to ridiculously assume the very, very worst possible, it would only be prudent, and even more so in this case, to let the market readjust and liquidate what it needs to liquidate. The worst thing to do is to follow what Hoover and FDR did. Doing that would truly create a crisis of gloom and doom.
Prolonging and Deepening the Recession - Vox
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