OPM

Michael Lewitt writes in today’s New York Times that if A.I.G. collapses, life as we know it will come to an end. Money grafs:

More promisingly, A.I.G. asked the Federal Reserve for a bridge loan. True, there is no precedent for the central bank to extend assistance to an insurance company. But these are unprecedented times, and the Federal Reserve should provide A.I.G. with some form of financial support while the company liquidates its mortgage-related assets in an orderly manner.

The Fed cannot afford to stand on principle. The myth of free markets ended with the takeover of Fannie Mae and Freddie Mac. Actually, it ended with their creation.

I’ll confess upfront that I’m no expert in macroeconomics. But I can tell when someone is reaching for my wallet. And I’m generally disinclined to trust a guy reaching for my wallet, especially when he’s surrounded by spoons, syringes and surgical tubing. Yes, I’m sympathetic to him. He needs help. But I’m not so sure that the help should come in the form of money right now.