When it's time to clink glasses a couple of friends usually ask me, “Whaddid the market do today?” They know I keep track and can always pop back an answer — up a hundred, down three hundred, whatever.

They're usually too polite to remind me that I usually have no clue, or a very small one, about what it means. As an exercise in greed and fear, “the market” moves do little more than reflect those emotions, feelings as fickle as a romantic adolescent.

What to do about the current market disorder is a libertarian issue beyond the now-routine argument that we should let the banks fail because they certainly erred and probably sinned. Libertarian thought is welded to a base of seeing things as they are.

The financial markets and the irrational government solutions of the moment are reeling from statist thought, which holds just the opposite. The political and financial establishments have married the idea that prices of stocks and bonds — and most other things — ought to result from something other than an agreement between willing buyers and sellers.

Now, conventional wisdom holds there is an underlying rationality to the financial world and that the bright and hard-working investor or trader will prosper “over time” by identifying and acting on that reality.

That may be true if someone will create a useful definition of “over time.” And if prosperity is redefined as wealth rather than numbers of dollars. And if the police power of the state is not permitted to inject irrationality into private investing decisions.

If “over time” is taken to mean yesterday, the ultimate fear, panic, ruled the grimy corners of Wall Street, and the sky really is falling, all because a certain minute and polluted strain of libertarian sentiment invaded the alien environs of the United States House of Representatives.

Our leaders there paid lip service — so transient as to be nearly invisible — to one immutable law of economics which decrees that stupidity hurts because it is supposed to.

A libertarian glancing at a calendar and noting the proximity of Nov. 4 won't take comfort from that. He will recognize that enough seat holders glimpsed their real fear, the threat of having to seek honest work when a new congress is sworn in January.

It wasn't free-market clarity of thought that prompted the defeat. It was political panic.

It occurred to enough of our 435 representatives that an “aye” vote would require them to explain to Joe and Sally Sixpack that while (a) the titans of finance deserve rescue by the taxpayers, (b) you, Joe and Sally, are on your own after losing your life savings in precisely parallel games at the nearest casino. Or accepting a mortgage you couldn't afford.

You say the Sixpack family didn't understand the game, so tough luck Joe?

That's a miserable answer because the Ivy League PhD and MBA masterminds of Fanny Mae, Freddie Mac, Lehman, AIG, and the others didn't understand their game, either.

Nor did the politicians who created the climate which culminated in today's financial darkness.

If you need evidence that the bankers were shooting craps in the dark, just check almost anything written on the subject over the past six months. By the trillions of dollars they bought and sold and borrowed against assets whose value was unknown and perhaps unknowable –CDOs, CMOs, credit default swaps, and other derivatives removed by light-years from assets they were supposed to represent.

The Vegas casino analogy to the trading patterns of our best and brightest is exact: you stay, hit, or double down at the black jack table without looking at your second card.

A rational mind has more trouble dealing with the fallen czars of high finance than it does with the poor fellow who tries to break the casino bank without knowing the odds or the real rules of the game.

After all, we don't expect much sophistication from the average graduate of PS69 with a vocational certificate in welding from the local community college, but we have been conditioned to believe that advanced degrees from Harvard and Wharton represent actual knowledge and perhaps even a nodding acquaintence with ethics.

And against all experience we also expect our legislators to have sipped from the fountain of knowledge and to harbor instincts to honesty.

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The rejection of the so-called bailout bill yesterday was a routine application of politics as usual.

The failed bill will be cosmetized and passed. The representatives who voted against the original have the political cover they need. It's enough of a populist credential to work well enough until the election.

And in the 35 days remaining before the plebiscite, they can justify the lipsticked pig version we'll see in any of several ways. The most common one will be a soulful mien as they explain, “The bill was going to pass anyway, and I believed I could better guard your interests continuing to be part of the bipartisan process. Return me to congress and I'll…”. He adds that the version he approved was a far better idea than the original.

And the voters will probably buy it for reasons that can be well understood through an AP report.

“Treasury Secretary Henry Paulson emerged after the vote and warned of a credit crunch that would affect American businesses and said families would find it harder to get student loans and car loans,” AP said.

Pardon me, but loans are supposed to be hard to get. The lender is risking his resources and wants to know two things: Is the purpose of the loan reasonabe for this guy? And what are the odds that he will repay as he promises?

Secretary Paulson seems to suggest that is archaic nonsense. Loans have become just another entitlement.

I submit that in the most prosperous years of my life and yours only a fool would have staked us to a vehicle representing a year's income and a house representing five year's earning.

But because Washington, acting primarily if not wholly thorugh the Federal Reserve Board, has made money dirt-cheap or free in order to create a popular feeling of prosperity, we have announced to our people that they have a right to borrow and borrow cheaply.

That is precisely what Paulson, Bernanke, and their predecessors did with the active encouragement of the political parasites. Only Ron Paul and a few others wore themselves out spitting into the popular wind of SUVs for one and all, six-year-car loans and easy terms on that villa of threes — three stalls in the garage, three bathrooms, three years of interest-only.

The tiny Paul coalition opposed creating a climate forcing banks to lend to irresponsible borrowers. They rebelled at the political crusade for universal home “ownership.” They balked at a thousand schemes for the government buying of things government couldn't afford.

They lost. And here we are.