It appears that common sense may finally be winning out over ideology in the U.S. government's effort to address the worldwide financial meltdown.  Even though government intervention into "free markets" is anathema to most Republicans, as I stated in a previous post, there are certain circumstances where smart policy responses can go a long way toward limiting damage and reinvigorating the system—without irreparably harming our capitalistic structure.  Treasury's initial response (the $700 billion bailout), while potentially somewhat helpful, seemed to attack the problem indirectly (i.e. unfreezing credit markets by improving financial institution capital ratios through the purchase of their illiquid assets).  Why not improve those ratios by injecting capital directly into the institutions?  No doubt that approach was met with much resistance among the administration's staunch free-marketeers.  It is, for good reason, a non-trivial step to have the federal government actually take an ownership stake in private financial institutions.  Fortunately, it appears that the forthcoming plan is being crafted in a way that does not grant governance rights to the government or significantly impair existing shareholders.  Such a plan will never be popular with free market purists, but it should be popular with those who are interested in pragmatic solutions that do not (or at least should not) do long term damage to our uniquely American system.