A profile in courage

Republicans prefer market discipline to regulation because of the swifter, surer, and harsher punishments that it metes out. Democrats prefer a kindler, gentler world of regulation, despite the perverse incentives that it creates. Nevertheless, it is unusual for any administration to draw a line in the sand in the throes of an election:

“Moral hazard,” said Paulson, “is something I don’t take lightly.” He’s saying bad financial behavior must be penalized, not rewarded. That’s the essence of the issue. The risk of failure is essential to an efficient economic system, and that includes financial risk.