The recent failures of Bear Stearns and the Carlyle Group, coupled with turmoil in the housing markets and overall pessimism about the economy, has Congress rushing to microphones to promise a legislative quick fix. Meanwhile, President Bush and the Federal Reserve are being second guessed by liberal economists for not promising more government intervention. What is the best course of action for the government to take?

Today former congressman Ernest Istook, a distinguished fellow at Heritage, sat down with Heritage’s top economists, Bill Beach, David John and J.D. Foster, to discuss what the government can — and can’t — do to remedy the current situation. Listen to our first-ever “blogcast” below.

For more research about the current economic situation, please read Heritage’s explanation of how to prevent the next subprime crisis ^[1] and why the Federal Reserve’s action on Bear Stearns wasn’t a taxpayer bailout ^[2].