There's a time for free market and a time to step in and slap people.
In the AIG situation, lack of regulation allowed executives to write their golden tickets by crafting contracts that allowed them to receive crazy bonuses under any circumstance. That includes failure. That includes incompetence. And that includes getting those bonuses no matter what the money source is.
WITH regulation, bonuses would be prohibited if the funds came from taxpayer money.
WITHOUT regulation, we're fucked with iron-clad contracts.
And that, my friends, is the dark truth about "libertarians" (what many embarrassed Republicans like to call themselves).
Republicans and "libertarians" like the ol' hands-off approach. It'll fix itself.
Obama's pissed off enough about it to step in. That's what Democrats do.
Call it socialism. Call it government intervention. Call it Penelope for all I care. It has to be done. Why?
The government's #1 job is to protect us. Just as much as that means military protection from enemies and law enforcement protection from terrorists, it also means economic protection from corporate thieves and corporate terrorists. That's what we're dealing with here.