'Too Dumb To Fail'

Short but sweet article on the government bail-out of Bear Stearns. Explains everything succinctly.

Rescuing failing companies obviously runs the risk of creating moral hazard—if we insulate people from the consequences of their irresponsibility, they’re more likely to be irresponsible in the future. But the Fed did a good job of lessening that risk, making sure that Bear suffered a heavy toll. The sale punished Bear shareholders severely, valuing Bear at just two dollars a share, down from sixty dollars a few days before, while thousands of Bear employees are likely to lose their jobs. That’s about as harsh as a bailout gets. . . .