Sale of the Century

AS policymakers huddle in Washington and scheme up plans to end this financial crisis, markets around the world have continued to panic. Such a response may well reflect a prudential understanding of Congress’s innate inability to respond rationally to nearly any economic circumstance, let alone a crisis.

But part of the problem may well be a kind of myopia. All crises end, and this one will too. It will end not because of a government intervention, but rather because asset prices have adjusted to the point that taking risk makes sense again. Governments do not have enough resources to purchase all of the world’s risky assets. Investors do.