Then again, maybe they shouldn't have let Lehman Brothers fail...

An excellent Wall Street Journal front page article explores the far reaching ramifications and pains of letting Lehman Brothers fail.  We think that it was a terrible decision by the Fed and U.S. Treasury, which helped to put us where we are now, resulting in what we consider to be a rescue plan that amounts to nothing more than a $700 billion band-aid....

Lehman's bankruptcy filing in the early hours of Monday, Sept. 15, sparked a chain reaction that sent credit markets into disarray. It accelerated the downward spiral of giant U.S. insurer American International Group Inc. and precipitated losses for everyone from Norwegian pensioners to investors in the Reserve Primary Fund, a U.S. money-market mutual fund that was supposed to be as safe as cash. Within days, the chaos enveloped even Wall Street pillars Goldman Sachs Group Inc. and Morgan Stanley. Alarmed U.S. officials rushed to unveil a more systemic solution to the crisis, leading to Sunday's agreement with congressional leaders on a $700 billion financial-markets bailout plan.

In hindsight, some critics say the systemic crisis that has emerged since the Lehman collapse could have been avoided if the government had stepped in. Before Lehman, federal officials had dealt with a series of financial brushfires in a way designed to keep troubled institutions such as Fannie Mae, Freddie Mac and Bear Stearns Cos. in business. Judging them as too big to fail, officials committed billions of taxpayer dollars to prop them up. Not so Lehman.

Lehman's Demise Triggered Cash Crunch Around Globe - Wall Street Journal