Daniel Gross brings up a point that isn't discussed much in polite company, namely that bailouts only occur for holders of capital. Sounds to me like something other than the market is deciding winners and losers in the Bear Stearns case. The truth is that these conglomerates meddle and disrupt market outcomes all the time in myriad ways and none of the usual free marketeers seem troubled by it.
The individuals caught up in the housing bubble and facing foreclosure would seem to have a better case for bailout than the hedge fund types who will get a nice tax break on any losses they take. The overall point is not to be bamboozled by anyone who simply shouts "free market" at the top of their lungs to dispute a policy choice. In reality, no such animal exists and ironically, Wall Street is many times purported as the closest to a true free exchange that we get. Perhaps not.
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