Private Gains and Socialized Risk
It is amazing to Workers that people are upset or suprised at the Fed's bailout of Bear Sterns or its direct lending to non-banks. This is just the same thing that the Fed has always done - distribute wealth e.g. socialize the risk - to monopoly capital at the expense of the poor schmucks like all of us who aren't banker power elites and now investment bankers.
The Fed was created to subsidize and cartelize the banks (See Murray Rothbard's Wall Street, Banks and American Foreign Policy for the big picture on this), to prevent competition and to allow the bankers to receive private gains e.g. the big profits in the good years, while during the bad years they get cheaper money and now, well, direct bailouts. Financial institutions had 40% of the profits in 2007 while employing 5% of the workforce.
This shouldn't surprise people. But maybe now it will raise people's awareness and thus a call for change. The Fed should be de-chartered and its monopoly power over money ended. We deserve better than seeing our hard-earned money being given to those better off than us, and who have big sums to play the market (you shouldn't play the market unless you can afford to lose). If the money was allowed to compete it would holds its value instead of the downward spiral the dollar is having and will continue to have as the Fed bails-out and prints more money in ever more desperate attempts to control something that should be free.