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Better than a bailout: four steps policy makers could take to help financial markets.

WHAT SHOULD THE federal government have done in lieu of the $700 billion bailout signed into law by President George W. Bush? Here are four common-sense steps that don't involve the partial nationalization of the finance industry:

1) Raise the capital ratio for government sponsored enterprises and other investment banks to at least the level imposed on commercial banks-a cash balance of generally 8 percent of the market value of each firm's tradable assets weighed for the risk of each...

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