Best columns: Un-free market, Buying time

The free-market free fall

Whatever happened to “self-reliance,” “individual responsibility,” and “a faith in free markets”? says Steven Pearlstein in The Washington Post. Those values are as central to our national identity as they are to our economic model. But in rescuing Bear Stearns, Fannie and Freddie, and now Lehman Brothers from the wrath of the markets and their own bad judgment, the U.S. government has waded “hip-deep in the direct management of the financial system.” And this from a government pushing deregulation and privatization. When this crisis is over, probably after “several more rescues and interventions,” don’t be surprised to find a new “willingness to use the powers and resources of government to enhance economic stability.”

Bite beats flight in today’s market

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“One of the many paradoxes of the stock market,” says Brett Arends in The Wall Street Journal, “is that the worse it gets, the better it gets—at least, for those still able to invest.” Human nature makes us want to flee when things get bad, like stock prices. But of course, that’s backwards for smart investing, and at least one smart investor thinks now’s a good time to buy. The “frequently bearish” money manager Jeremy Grantham suggests you’ll get a decent seven-year return on “high quality” U.S. equities—about 5.6 percent on top of inflation—or “a broad investment in emerging markets.” Yes, “there are plenty of reasons to be nervous” in today’s market, and that’s why many assets are reasonably valued.