I of course feel differently. Without a bailout, we will end up with a much bigger recession or even a depression. With a bailout, we will hopefully have something not much more painful than the recession of the early 90's.

In spite of the philosophical issues that everyone agrees upon such as not punishing bad behavior and other 'moral hazards', smooth economic growth is much preferred over volatile up and down swings. This is the overriding reason that banks have had a defacto government guarantee on their existence and the reason banks are rescued (or are forced to merge).

Prior to the emergence of central bank rescues, a single bank failure/run could and would ruin an economy for years. Panic would spread from city to country and around the globe. Since the Fed stepped in and saved Continental Illinois Bank in the 1984, saving banks that are "too big to fail" has been recognized as prudent financial management in spite of the moral hazard issues.

Most reports I have heard have blamed the current total collapse of parts of the credit market on the Fed making a point that it wouldn't save save every bank if bank management was stupid. The Fed refused to save Lehman Brothers Bank and suddenly, financial risk managers realized that their seemingly stable counter parties may not be there next week. Lending stopped.

My point is, sure some people acted stupidly and might have become undeservedly wealthy and now deserved to pay a steep price, but I don't see any reason to ruin the entire global economy just to ensure that someone gets punished.