What conclusions about the economy and financial markets are possible after a week when unprecedented government intervention was required to stabilize the greatest free market economy the world has ever seen?

After coming to terms with the virtual nationalization of the mortgage industry with the federal government's rescue of Fannie Mae and Freddie Mac, investors had to digest: the $85 billion rescue of insurance giant AIG; a temporary ban on short selling 799 financial stocks; moves to shore up the $2 trillion money market fund industry after Putnam Investments said it would liquidate a $12 billion fund; and creation of a new agency comparable to the Resolution Trust Corp., the agency used to work out the savings and loan crisis of the 1980s.

"Everything's been thrown upside down," says Argus Research economist Richard Yamarone. "We're in the throes of a paradigm shift or a remodeling. I don't know what to call it, and who knows how it ends up."

Mr. Yamarone is not the only informed observer at a loss for words when it comes to discerning what the new rules and assumptions for financial markets and the economy will be. At the heart of the uncertainty lies a single question: To what extent do the emergency measures undertaken by regulators to staunch the credit crisis become the basis for permanent policy?

"Clearly, there are going to be pressures to change things, but what's unknown is how much gets changed and in what way," says Dreyfus Corp. chief economist Richard Hoey.

That access to credit will be tougher and terms less appealing is a given. But it remains to be seen how weaning American consumers and investors off the easy credit they've come to rely on will reverberate throughout the economy. Many expect consumers will play a smaller role in a recovery, whenever it occurs.

"We are suffering the fallout from the biggest credit bubble burst that we've ever seen," says Linda Duessel, equity market strategist for Federated Investors, Downtown. "We need to temper our expectations about how we can grow out of this."

Ms. Duessel says credit isn't the only constraint on consumers. Even if the government puts no more bailouts on its books, someone has to pay for those already promised.

"Make no mistake. Taxes will be raised. They must be raised," she says.

That price tag could grow in an election year, as candidates pursue voters in key states such as Michigan, where both John McCain and Barack Obama are proposing assistance for Detroit's beleaguered Big 3 automakers.

"You've got to win Michigan to win the election, so they're going to get the money for nothing," says Greg Melvin, chief investment officer of C.S. McKee, a Downtown investment manager.

And just as Lehman Brothers thought it deserved government aid, others will feel the same. A group representing auto parts suppliers last week asked congressional leaders to include its members in any loan guarantee plan for the automotive industry.

"One thing you can bet your bottom dollar on is that Uncle Sam is going to be more involved," says Duncan Richardson, chief equity investment officer for Eaton Vance.

That prospect doesn't thrill Mr. Melvin, who worries "Congress is going to come in and screw up this whole thing." Mr. Hoey, who earlier in the week cited congressional failures at problem solving, was more optimistic Friday after the response to a proposal to create a federal agency to unburden financial institutions of their troubled assets.

"There are hopeful signs you'll get a compromise," he says.

The problems will vex whoever wins the presidential contest and some question whether Mr. McCain or Mr. Obama has the required credentials.

"Neither of them seem like economic powerhouses," says Colin Symons, chief investment officer of Symons Capital Management in Mt. Lebanon.

Mr. Symons doesn't discount the importance of the Treasury Department and Federal Reserve in restoring a measure of confidence to the markets. However, he views the measures as short-term fixes rather than long-term solutions, citing the prohibition on short-selling as an example.

"The problem is not short [sellers]. It's bad financial companies," Mr. Symons says. "We still have these fundamental problems and I don't think there's much the government can do about it."

Short sellers invest based on their belief a stock's price will fall. They have targeted financial stocks because of questions about the value of loans, derivatives and other assets on their books. Critics say short sellers' pessimism is unjustly punishing the stocks. Banning the practice will "combat market manipulation that threatens investors and capital markets," Securities and Exchange Commission Christopher Cox said.

Last week, the market careened between despair and hope. The Dow Jones industrial average shed 504 points Monday on Lehman's bankruptcy, advanced 142 points Tuesday, fell 449 Wednesday, jumped 410 on Thursday and extended the rally Friday with a 369-point advance, finishing at 11,388, off 34 points.

The manic gyrations didn't shake Louis Stanasolovich's conviction that we are in the midst of a long-term bear market. The president of Legend Financial Advisors in McCandless foresees paltry returns from stocks over the next decade, "probably mid-single digits at best."

His meager expectations match market sentiment. Jittery investors are unwilling to place bets even on profitable companies, preferring liquid assets they hope will provide safety and security.

"There will be less of an appetite for risk," says John Milne of JK Milne Asset Management in Station Square. "The new rules will be not to make money, but to keep money,"