For incumbent Republican Mark Souder, Libertarian William Larsen and Democrat Mike Montagano, running for the 3rd District seat in the U.S. House of Representatives means confronting an unprecedented financial crisis.

In the last two months before the Nov. 4 election, every other issue has receded behind a global economic crisis that has sometimes broken into an investor panic. Stock markets in the United States, Asia and Europe have plummeted. The Federal Reserve and central banks around the world have sheared interest rates and injected trillions of dollars into financial markets.

With remarkable rapidity, the U.S. government has tried to rescue mortgage lenders, the largest insurance company in the world and investment banks. It has agreed to become a direct lender to businesses throughout the economy and sent financially battered auto companies billions to speed their retooling to produce smaller, more fuel-efficient cars.

There hasn't been such a dramatic expansion of governmental involvement in the national economy since Franklin Roosevelt's New Deal was introduced 75 years ago.

Meeting voters who generally support Republicans on the campaign trail, Souder sees that his support for the $700 billion bailout legislation is at odds with their inclinations. But he argues that the bailout - and likely other forms of intervention - are necessary to avert disastrous consequences and, perhaps, even greater federal intervention.

He acknowledges that expansion of government control of the economy is risky, “but I'm more scared of an economic collapse.”

As a representative from a heavily industrial district, he said, he sometimes has to compromise pure conservative economic principles for the greater economic good of northeast Indiana.

“This is a manufacturing district that has managed to survive, but it's under duress,” he said.

With some trepidation, Libertarian Larsen opposed the $700 billion bailout. Even as Americans' overall savings rate dipped near and sometimes reached 0 percent, speculators chased quick riches in real estate and the sales and brokering of mortgages and mortgage-backed securities.

“This is just like the Depression. Instead of buying on margin to get stocks,” he said, investors traded on tiny margins to secure exotic financial instruments based on mortgages.

Even though Larsen reluctantly advocated “letting the cards fall where they will,” then rebuilding, he didn't downplay the difficulty of rebuilding the economy after this upheaval. Because it began with a speculative bubble based on housing, absorbing the excess in housing stock is an indispensable foundation for the recovery.

“I think it's going to take a long time to work through the surplus of homes,” he said. Democrat Montagano did not arrange an interview for this story after repeated requests. He did not respond to an invitation to describe his priorities, qualifications and background for our election Web site. Montagano's campaign Web site did not include any reference to the financial crisis before The News-Sentinel deadline.

In a Sept. 22 e-mail responding to written questions on the financial crisis, Montagano said regulatory changes are necessary as part of a response to the crisis.

“We need legislative oversight that will allow our government to support our financial markets - not simply bail them out. We need reform. We need a change in Congress to remove legislators like Mark Souder, who are beholden to lobbyists and special interests. Unfortunately, the collapse of these firms will not just punish Wall Street. Its effects are felt deep and wide. The people of northeast Indiana are being punished right now as they lose their homes and savings,” he wrote.