One of my discomforts with almost all economic arguments is the strong partitioning of ideas. If you are free market, the government can do no good and if you a

One of my discomforts with almost all economic arguments is the strong partitioning of ideas. If you are free market, the government can do no good and if you are "Progressive" corporations are evil. Munger is mostly above this level of naivete, but not completely. He points out that government spending is too high and that leverage can be too dangerous (i.e. gambling.) However, he seems to be prescriptively mute on the former and favors prohibition on the later. The school of thought to which I am a recent entrant suggests a more uncommonly (expressed) alternative. Keep all the gov debt and spending as low as possible when times are good. Regulate to a minimum. When a crisis occurs, the government should sometimes step in to stabilize a violently turbulent system. (Sounds like Keynes, no?) However, you don't bailout a company. That ruins the fabric on which capitalism is built. The losers loose their money. An option is a derivative; not all derivatives are options. Bailouts make all derivative speculation, speculation in cheap options. Don't ban derivatives. Ban bailouts.