It was a tale of two cities today with joy in Washington and despair in the financial markets of New York. When George W. Bush left the White House, he took Wall Street's free-lunch order forms with him and the panic is on.
The Dow lost 4 percent, the Nasdaq and Standard & Poor's 500 index more than 5 as Bank of America, J.P. Morgan Chase and Citigroup fell to new lows.
While Barack Obama was saying “Without a watchful eye, the market can spin out of control,” Wall Street was doing just that in expectation that the Henry Paulson billion-dollar giveaways would now be transformed with conditions, oversight and transparency.
With bank bailouts on the brink of being controlled by the firmer hand of an Obama Administration, shareholders are bailing out of institutions that flourished in the greed-is-good era and now are failing, shrinking or merging.
In this new climate, "too big to fail" may be an idea whose time has passed, to be replaced by smaller entities that can really work in a competitive free market.
How to get from here to there without falling in a financial abyss is the challenge for both government and the private sector. The new people in Washington had better be up to it.
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