Wednesday, Dec. 31, 2008
Letting Lehman Go
This is a hard one, given that I've already taken the Fed to task for bailing us out so often. But once the precedent had been established with Bear Stearns, Fannie Mae and Freddie Mac, letting Lehman go under in disorderly fashion in September shocked markets and seems to have led to the near financial meltdown that followed. It's not clear exactly how the Fed and Treasury could have managed a better Lehman conclusion, given the laws in place at the time and the lack of a buyer. But what we got was pure bad news.