Treasury Secretary Henry Paulson visited the editorial offices of the LA Times and offered up some chicken soup for the libertarian soul.

Jon Healey: Many of the people we speak with don't like this because they see the results of the government's work being sustaining housing values that should have been allowed to come down.

Henry Paulson: Again, I've given my answer to that. I think what we're doing is avoiding a market failure that would have forced housing values down in a way that was not in the investors' interest, and in a way that the market wasn't intended to work.

Tim Cavanaugh: How can you force values down? Why aren't values finding their natural level?

Henry Paulson: The way values would go down is, as I've said, you'd have market failure. You'd have a situation — and again, I don't know how much more clearly I can say this — I don't want to debate this with you; I just want you to understand the point, and you may have a different view.

It gets even better:

Peter Hong: Could you be a little clearer on what you mean by "market failure"?

Henry Paulson: As I've said, chaos. If ever there is a role for government to bring the private sector together to deal with a situation that — when I say market failure I say that we have an unprecedented situation, and the private sector has to find a way to deal with that.

Truly, find me a more abused word than "market failure." Remember the Higgsian thesis of crisis and intervention?