We waited in vain Wednesday to hear the president say what many people know to be true, that Washington deserves a good share of the blame for the current economic crisis.

Instead, he spoke of "excesses and bad decisions" by lenders, borrowers and investment banks. He spoke of lenders not being careful enough when they extended credit. He spoke of borrowers getting in over their heads. He spoke of easy credit, and of bankers who were too free with cash. He spoke of a culture of optimism — former Fed Chairman Alan Greenspan might have called it "irrational exuberance" — that believed real-estate values would rise eternally.

But he said nothing about the folks in Washington who are supposed to regulate the lenders. Nothing about laws Congress and the president passed that essentially required lenders to write high-risk loans. Nothing about a Federal Reserve that set interest rates at artificially low rates, encouraging easy credit and giving Americans little incentive to save.

An increasingly angry America seemed to notice the oversight, which is why so many in Congress are hearing from constituents who view the pending bailout proposal as a gift from the powerful to the wealthy, at the expense of the masses.

The beauty of the free market is that it self-regulates. Smart investors prosper. The ones who make poor choices, or who get carried away into risky ventures, lose their money. The stark reality is that a government bailout, no matter how necessary it may be to keep the economy from grinding to a halt, will send a message to Wall Street encouraging risky behavior. Go wild. The government will pull you out in the end.

Americans always should be suspicious of political decisions that come within weeks of a major election. Right now Congress — including two high-profile presidential candidates — has every incentive to appear as if it is doing something. In Washington, drastic measures done quickly often result in unintended consequences.

On Thursday, the $700 billion bailout seemed to have shrunk to an initial $250 billion, with more to come if the Treasury secretary could demonstrate the need. Congress clearly is trying to gain more control over the matter, and it is trying to keep the bailout from granting the Treasury secretary authority that could not be questioned or reviewed.

We like the direction the discussion is heading. However, we are most intrigued by an alternative being discussed by a group of conservative lawmakers. Instead of a bailout, they would have Washington provide insurance to struggling firms that agreed to conditions, such as a freeze on their bad assets. The concept, according to an Associated Press report, would be to more directly aim the pain at Wall Street, rather than at taxpayers.

Perhaps then, catastrophe could be avoided while preserving the lesson that free enterprise does indeed come with consequences.