Greed died of complications relating to over-leverage, under-regulation and lax oversight at its home in the nether reaches of your soul. Since the 16th century, when it played a key role in the Dutch tulip boom, Greed worked in tandem with its alter-ego, Fear, as the driving force behind the global free-market system. (When asked for comment, Fear politely declined, citing a busy schedule that has it everywhere at once.) Greed was also complicit in the Long Depression of 1873, the Great Depression of 1929, the 1980s Black Monday stock market crash and savings and loan crisis, the imploded dot.com bubble in 2000, and most recently the mortgage-backed security collapse. Much condemned throughout its life, Greed was rehabilitated during the US's Gilded Age as "good" by robber barons and railway owners, and again in the 1980s by junk bond traders, stock brokers and investment bankers. Its prominence dimmed during the recent housing boom, when no one seemed to have noticed it at all. Greed is survived by its close relation, Rapacious Capitalism, cousin Irrational Exuberance and siblings, the remaining five deadly sins: Lust, Sloth, Pride, Wrath and Envy. (Formerly a deadly sin, Gluttony was downgraded by the Bush administration as a healthy indulgence following the September 11 attacks.) In lieu of flowers, friends of Greed requested that donations be made to the Donald Trump Institute for Obscene Profits and Grooming Research. We are all Keynesians now. President George W Bush, who came into office with a bang, is going out with one. (Although not the kind that many of us feared; a US attack on Iran is about as likely now as a Christmas bonus would be for Lehman Brothers chief executive Richard Fuld.) The same US president who was swept into office on the shoulders of government hating conservatives is ending his blighted second term with an ironic flourish, presiding over the biggest corporate bailout since the Great Depression. At least Franklin Roosevelt's New Deal was new, a bold response to an unprecedented financial crisis. Mr Bush's legacy - in addition to an unnecessary war, warrantless wire-tapping and the foundation of a garrison state - will be a warmed-over serving of that free-market scourge, moral hazard. An administration that has largely evaded accountability for its own misdeeds is now extending a US$700 billion (Dh2.6 trillion) "get out of jail free" card to Wall Street. By shifting the obligations of polluted assets from private accounts to the public one, the administration is sending a clear signal: capitalism is a racket. Since 1990, after the Reagan administration repealed New Deal-era regulations on Wall Street, America's credit market debt has risen from $2.3tn to last year's $13tn, roughly the size of America's gross domestic product and more than a third larger than its national debt. (The bailout fund announced at the weekend by treasury secretary Henry Paulson would raise the country's legal debt limit to $11.3tn.) The age of Reagan begat the independent investment bank, which cut its teeth on junk bonds - low-rated corporate debt that promised high yields to compensate for higher risk. The junk bond frenzy led to the Oct 1987 stock market collapse, which was a bump in the road towards the much more lucrative margins offered by the tech bubble of the Clinton 1990s. From mid-1999 to mid-2000, Wall Street racked up $77bn in revenue for underwriting the share listings of hundreds of start-up companies, too many of which had no earnings history to go with their dazzling, if half-baked, business plans. The dot.com bubble went bust to the tune of an estimated $1tn. But Wall Street quickly recovered, leveraging a red-hot property market by turning doughty home mortgages into bundled assets that could be moved off the books of commercial banks as quickly as investment bankers could sell them. This cleared the way for more home sales, which bankers hungrily enabled by writing mortgages to anyone with a pulse. The Potemkin start-up of the past decade had become the indigent home owner of the next one, with predictable results: a crescendo of riches on Wall Street, followed by a harrowing crash. Only this time, the concussion is having a truly global reach. Not for nothing has the measured Mr Paulson urged foreign governments to set up their own bailout funds. So what's wrong with this? Nothing, assuming the "buy at your own risk" free-market standard still applies. Instead, Washington indulges Wall Street with an implicit safety net after having abetted its crimes. When chairman of the Federal Reserve, arch monetarist Alan Greenspan flooded the markets with cheap money in response to the collapsed tech bubble. This restored market stability but with record-low interest rates that fuelled a national addiction to debt. Regulators, meanwhile, did nothing to discipline Wall Street after the dot.com denouement and refused to intervene as housing prices reached perilous levels, even after it was clear that bankers were jobbing home loans to people who obviously could not afford them. Free markets are sustainable so long as risk takers are as liable for the punts that go wrong as they are for the ones they get right. The events of the past several weeks have exposed not the bankruptcy of capitalism, but the severity and depths of its abuse. @email:sglain@thenational.ae