Punchdrunk Paulson

There is no rhyme or reason to all the interventions from Washington.
Why save AIG, and not Lehman Brothers?
Why give JPMorgan $29 billion to buy Bear Stearns?
All this is being done on an ad hoc basis with no overarching philosophy.
A Republican administration has presided over the most far reaching intervention in the financial markets since the Great Depression in the 1930s.
Why have they forgotten the lessons that Milton Friedman drew from the Great Depression? None of the Keynesian pump priming worked. The reason the Depression was so severe was that the Fed did not know what it was doing and destroyed 30% of money supply by liquidating foreclosed banks.
The lesson for this crisis is for the Fed to keep the system liquid by injecting Fed Funds and keeping money supply stable.
The attempt to buy mortgages in an RTC Part II is misguided - it does not allow the excesses to be cleared out, and it inflates federal government borrowing.