Like most Americans, I suspect, I will always remember where I was, and what I was doing, when I learned that Goldman Sachs and Morgan Stanley would cease to be investment banking houses and become traditional bank holding companies.

I was sitting at my desk, in my office here at THE WEEKLY STANDARD, reading the Wall Street Journal. Not long before, I had absorbed the shock when their principal rivals--Lehman Brothers, Bear Stearns, and Merrill Lynch--had merged into larger banks or gone into bankruptcy protection. But this was, in the Journal's authoritative account, something else again:

Wall Street as it has long been known--a coterie of independent brokerage firms that buy and sell securities, advise clients and are less regulated than old-fashioned banks--will cease to exist. Wall Street's two most prestigious institutions [Goldman Sachs and Morgan Stanley] will come under the close supervision of national bank regulators, subjecting them to new capital requirements, additional oversight, and far less profitability than they have historically enjoyed.

It was that last note--the one about less profitability--that hit home with me. I confess that, residing hundreds of miles from Wall Street as I do, I had not often pondered the differences among institutions that buy and sell securities, or advise clients, and those saddled with stiff capital requirements and close federal regulation. But profitability is something I do comprehend, and now that these great banking houses will not be rolling in quite so much dough as before, I felt a twinge of compassion, and began to understand

I am, of course, being sarcastic here--although, as I hasten to point out, I acknowledge that Wall Street is unquestionably suffering one of its periodic anxiety attacks and recognize that the federal government is obliged, almost exclusively for political reasons, to do something--which means to spend taxpayers' money--to promote stability and restore confidence and appear prepared to prevent the economy from falling into the abyss.

This is a well-established pattern in the history of financial upheaval--think of the period immediately following the great stock market crash of October 19, 1987--and will, I am sure, accomplish its object. But is this really the historic turning point it is advertised to be? I am not so sure.

When asked what the market would do, J. Pierpont Morgan is supposed to have replied, "It will fluctuate." And so it has always done. For the time being, capital will be tighter than before, restricting credit--which is not always a bad thing--and businessmen will be reminded (as legislators, state and federal, seem never to learn) that neither bull markets nor recessions last indefinitely.

This is a fundamental reality of capitalism that seems never to penetrate the minds of journalists or politicians: Markets expand, contract a bit, and expand again, revenue streams are not always smooth, and for economic enterprise, the cost of overconfidence can be the same as the price of inertia: swift self-immolation. What appears to be huge, venerable, and financially indestructible today can be gone tomorrow.