Free money everywhere...from republicans??

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That assumes that what people earn is determined on a level playing field. It is not.

I can see the Gov't buying up debt, but only if we pay $0.50 (or whatever they're actually worth) on the dollar rather than the full price that the banks want. The banks could decide, individually, if they want to take our deal or not.

and we need some anti-trust laws so that no single entity is 'too big to fail' ever again.

too big to fail was the problem? i could have sworn it was crappy business practices.

The crappy business practices got them into the mess. "Too big to fail" is why we're contemplating government action to get them out.

Those regulations have been in place since the Carter era (and in fact the creation of the mortgage-based bonds that are bringing down the investment banks that bought them was made possible by deregulation) - that the bubble didn't form until much more recently surely shows that it is mainly due to the second factor you mention - artificially low interest rates. The Gospel According to Greenspan is as follows: If you have a problem, even if it's got nothing to do with interest rates, cut interest rates. If everything is going swell... you leave them as they are. The US has the dot com bust, the falling dollar and now the housing market crash to thank him for.

My understanding has been that the securitization of mortgages has had a huge amount to do with this, as well. Mortgage brokers sell mortgages to individuals, making a fee on the transaction, and then bundle that mortgage in with a bunch of others and sell them to a bank or an investment firm. Since the broker takes no personal risk whatsoever in selling a mortgage, and makes a larger fee on a larger loan, the brokers had financial incentive to sell as many, and as big, as they possibly could. Furthermore, there was pressure from the banks and investors (who believed that securitization made the entire bundle safe, even if individuals failed) to lower the standards of income and collateral as the pool of normal, secure homebuyers dried up.

None of these companies should have become big enough to have this kind of devastating power over the economy. See, now it's come to the point where these companies are just TOO important to let natural market forces eliminate. It's too much power and responsibility for a handful of companies to have.

Sure this bailout will help and unfortunately it's just something that has to be done even though I don't think these companies deserve taxpayer money for screwing up. Nothing is going to really change unless the polices that let this happen are fixed. So expect to see this happening again...