Bailout on the banking and finance side is already happening and is taking two forms: 1) socializing the risk burden, which has been happening for some time now via implicit and explicit MBS guarantees and outright purchases of poorly performing loan pools (and even companies in the case of B-S); and 2) loose federal monetary policy supporting currency devaluation and moderately high inflation, which enables operators in the market to write down bad paper, upgrading balance sheets to sustainable levels.

None of this takes the form of outright subsidies, eg. welfare checks to poor people that right-wing douchebags rant about, socialist democrats, blah-blah, etc. But it is every bit welfare, a HUGE government subsidy, and it subsidizes corporations, banks and investors — sophisticated players who are in a position to benefit from the off-book and structural adjustments. The reason it’s happening is everybody on the inside is shit-scared the bubble’s going to ‘POP’. Subsidies and bailouts are ‘deflating’. Only alternative to ‘popping’ is ‘deflating’. So if you’re an establishment guy, you should be for bailouts.