Academic

Slate's business site The Big Money launched today (not sure if that was the plan before Thursday, or if it seemed like the right time - and boy was it).  It leads with a critique of the government's decision to let Lehman die.

The Big Money doesn't exactly have a thousand mile view on the question.  The Slatesters note that Lehman's gonna go for pennies, and if the Fed had backstopped the deal, Barclay's might have got it for two bucks a share or whatever.  Isn't two bucks better than pennies?  And don't we know that at some point, Lehman's assets will start looking a little better (though check out the fallout of the S&L crisis - that cost the government $160 billion, and kept lawyers busy for years)?  They also, kinda surprisingly, talk about short sellers, and they cite the decline in the 30 random stocks in the Dow, not the other indexes, as evidence of economic weakness.

We're lawyers, so we won't opine further.  Here is Felix Salmon:

yes, the Fed treated Bear and Lehman very differently -- but that's the whole point. The last thing that the Fed wanted was for the Bear Stearns bailout to set a precedent, and for bond investors to have confidence lending to any US bank, safe in the knowledge that the Fed would always ensure they were paid back in full. The US government's contingent liabilities are quite big enough, thank you very much, without adding the entirety of US bank debt on top.