How should Convervatives think – and only then, act – concerning the recent government bailouts to financial (and now, automobile) firms?

One commentator on CNBC noted that as many as 80% of people working on Wall Street could classify themselves as ‘Republicans,’ from floor traders to brokers to the corporate boardrooms.  And yet, as the mortgage, credit, and liquidity crises emerged and fed on one another, these self-described Republicans looked to government to bail out a host of firms, from Bear Stearns to AIG.  Secretary Paulson, the ex-Goldman Sachs CEO, duly responded to the cries from his old banking buddies, Bernanke got on board, and Congress – including Republicans and John McCain, their standard-bearer in the election – acquiesced to a shocking bailout called TARP, the largest government transfer of wealth in U.S. history.

It was called an “investment,” of course, even by some Republicans.  CNBC journalists opined that we should not worry about principles of free markets, or the moral hazard, because holding to principle would mean the onset of a financial “nuclear winter” if Goldman, Merril, Bear, and/or Citi were allowed to blow up, ala Lehman Brothers.

Two questions immediately present themselves. How did we arrive in this mess, anyway?  That is, who and what caused this situation? Was it Wall Street? Government? Real Estate speculators? Short sellers in the markets?  Consumers? Mortgage brokers?

The second question is more troubling but simpler to address – why have so many Republicans, so-called conservatives mind you, joined the collectivists in stealing from the American citizenry?  We shall attempt to show how poor thinking on the Republican side, combined with sheer political demagoguery on the collectivist side, and abetted by the Bush Administration (Paulson, Bernanke, and Cox at the SEC), functionally colluded to produce this mess.  In other words, all of this current economic crisis was avoidable, which makes it all the more tragic.  Worse, the effect is that the freedom of our markets has been severely compromised under a so-called “conservative” Republican administration.  What happened? Why? And how can conservatives respond now, that the Big Three automakers are asking for taxpayers to “invest” in them?

The answers to this questions must begin with right thinking, which can only then begin to inform what actions conservatives must make, both in the solutions they propose and the socialist agendas they must resolutely oppose.