On February 15, 2002, an article of mine was published titled, Capitalism's foul odour -- Free market becomes free-for-all. That was written in the context of Enron sinking like the Titanic without a trace, dragging with it Arthur Anderson, hailed as the first of the five superstars among the audit firms.

I had concluded the piece warning, in effect, "You ain't seen nuffing yet!" since God had inexplicably failed to put any ceiling on human greed and stupidity, and promised the readers juicier and more arresting (double entendre intended!) stream of stories.

The promise was duly kept with the unravelling of an apparently unending series of scams involving a number of companies, mostly in the United States, but also some in the United Kingdom, Italy, Japan and elsewhere, though not on the same scale and magnitude.

No doubt they left employees and investors devastated, but somehow they were able to pick up whatever pieces they could and rebuild their lives, and at least had the satisfaction of watching the desperadoes among the corporate tycoons who played with their hard-earned money marched to the courts in hand-cuffs, with hefty sentences handed down.

• Global financial meltdown and Impact: Complete Coverage

It is not unusual for the body politic of the US, being unbridled in its practice of free market capitalism with all its inherent temptation to make a fast buck, to go periodically through such viral epidemics, the most deeply embedded in memory being the catastrophic market crash of 1929 and the resultant Great Depression.

It had its savings and loans crisis and dot.com bubble of the 1980s which, at the time, looked like the unscalable peak of financial malfeasance.

The convulsions through which the US is now passing have no precedent. Beginning from Freddie Mac and Fannie Mae, several bubbles are bursting simultaneously, leaving the financial universe in utter ruins. No viable or usable pieces are in sight to reassemble it to its old shape again although the US Administration claims to have worked out a bailout package.

More questions than answers

Copious commentaries and oracular prognostications have been flooding the public domain for the past several weeks on the whys and wherefores of the debacle. Everyone has suddenly become multi-handed, dishing out propositions prefaced by 'on the one hand, on the other hand, on the third hand. . . '!

I leave the readers free to have their pick as suits their temperament. What will strike them wading through all that welter of punditry and profundity is that it raises more questions than answers.

First and foremost, what were the Treasury Secretary, and the Chairmen, Federal Reserve and the Securities and Exchanges Commission, whose duty and responsibility it is to keep tabs on the working of the country's financial system, doing when the various financial institutions and investment banks were indulging for such a long time in reckless misconduct, taking such unacceptable risks and causing such havoc?

They have been in their posts for sufficiently long time to have got wind of the egregious deviations from prudence, propriety and public weal.

How come in their testimonies to the Congress they have been routinely giving out anaesthetising assurances about the strong fundamentals of the economy and their being on top of the developments in Wall Street?

Further, it is somewhat odd on the part of such knowledgeable and experienced high functionaries in the government that they should be unsure of the exact approach to be adopted.

Taxpayers must surely have wondered on what parameters one diseased institution -- Lehman Brothers -- is allowed to die, but a whopping $85 billion is pumped into another -- American International Group (AIG).

Secondly, what happened to the great economists of the US, with many Nobel Laureates among them? Why did they fail to notice the glimmerings of the collapse in the making and sound the alarm long before the financial institutions slid into the sub-prime abyss?

After all, they knew, or must have known, all that there was to know about the modus operandi of manipulators who mulcted the financial services sector in previous scandals such as those relating to Banco Ambrosiano, Bank of Credit and Commerce International (BCCI), Barings Bank, Credit Lyonnais, Lloyd's and the Insurance Industry in General and Salomon Brothers and the Treasury Bonds.

As regards investment banks, the whole US was reeking with the malodorous role they, with Merrill Lynch in the lead, played to inveigle investors into buying shares in companies which the know-all 'quants' were privately describing as junk.

Hysterical exuberance

Their silence, like that of the dog that did not bark in the Sherlock Holmes mystery, certainly calls for convincing explanation. It is pointless to be having so many economists and think tanks, who are quick to preach patronisingly to other countries on the best practices and management precepts they should follow but who default in making them applicable to the institutions right under their nose.

The most charitable explanation that one can think of is that while the shady marauders were in on the take, creating and exploiting the financial anarchy for making their pile, the academics and the analysts of credible standing went along with the hysterical exuberance lest they be considered spoilsport.

The same taciturnity on their part is persisting in regard to the so-called bailout package. Their attitude seems to be to let the events play out as they will, without any concerted effort by, say, issuing a public statement, or volunteering to give evidence before the House/Senate Committees holding hearings, to put the US administration and the Congress wise on the downside of the package.

They have left the field free to President George Bush, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, with the result that people have been denied a categorical assessment of what it will take to set matters right.

All that the trio has come up with is the $700 billion bailout with no guarantee that it will be the conclusive answer to the present situation. Although the US House of Representatives voted against the bailout package, efforts are on to have it cleared nonetheless.

For starters, the bailout plan proposes to use taxpayers' money to help out those who had been fattening themselves by throwing dust into the investors' eyes. Giving carte blanche to the government to acquire and dispose of 'toxic' assets and worthless mortgages is a sure recipe for disaster fraught with venality, fraud, embezzlement and waste in actual implementation.

Micawberian hope

The government, by this package, is letting itself into a bottomless abyss, since it is obvious to even a lay person that the drawdown from the government's coffers would not stop with the amount now sought but may exceed more than double that figure.

There is no certainty that injections of massive amounts will lead to the restoration of financial health of the institutions receiving assistance and the retrieval, recovery and sanitisation of any substantial part the 'toxic' assets and mortgages.

There is also no commitment as to the precise action plan and timeframe within which it will be accomplished. This means, especially at a time of change of US administrations and the election of new House of Representatives and one-third new members of the Senate, fixing responsibility and accountability will become extremely problematic.

At the moment, therefore, any step that the US administration might take looks like a gamble, with a Micawberian hope of everything turn out to be for the best. In short, there is no light at the end of the tunnel.

Here is a lesson for India's economic players both within the government and outside. Luckily, India's regulators have measured up to the level of alertness and oversight necessary to keep the financial and banking sectors on an even keel.

Decision makers within those sectors too have shown themselves capable of the needed prudence and responsibility in running the institutions under their charge.

That is why India is largely untouched by the ill winds that are blowing. It is essential to avoid being overtaken by complacency and overconfidence. Especially, in regard to collaboration, merger, acquisition and amalgamation, great circumspection and exercise of due diligence is required, without being carried away by the glamorous brand image of foreign names and the PR patter of savvy negotiators.

The muddle in the US only proves that industrial nations do not necessarily have the monopoly of wisdom.

• Global financial meltdown and Impact: Complete Coverage