We keep being told how dire the financial situation is. But then Warren Buffett steps up with a $5 billion investment in Goldman Sachs -- a drop in the bucket compared to the proposed $700 billion bailout -- and the markets respond warmly.
Mutual funds and institutional investors are the majority stockholders in U.S. companies. While they are not immune to panicky thinking, their job -- their responsibility -- is to make decisions that will protect their multibillion-dollar investments. A sustained sell-off is not a protection strategy.
Congressional leaders are beginning to communicate that the narrow-based bailout hurriedly concocted by Treasury Secretary Paulson & Co. is a non-starter. But at the same time they should emphasize they're dedicated to crafting a more comprehensive solution to a crisis that's bigger than so-called toxic securities and a potential credit seizure. That solution should include Main Street as well as Wall Street, and provide at least a template for long-term investment in America's human and physical resources.
The crossroads that we're at is not just saving the financial system, but all the pillars of the economy -- infrastructure, education, health care, as well as credit facilities.
If doing this takes longer than a few days -- which it will -- so be it.