Is it a $30B bailout by the Fed or just a smart move?

— -- The Fed made available $30 billion to support the Bear Stearns sale less than one week after announcing it will provide $200 billion in 28-day loans for cash-starved financial institutions. Taylor, who heads a non-profit group of community financial associations, wishes that the Fed's rush to pour money into the financial markets was matched by government action to help homeowners threatened with foreclosure.

The Fed's role in the Bear Stearns sale could end up costing taxpayers — or the government could make money on the deal. In return for $30 billion in financing, Bear provided as collateral difficult-to-price securities that investors now shun. If investor demand recovers, the Fed could turn a profit.

Others say the Fed's action was required to avert an even worse outcome. "You can say you don't want to reward risky behavior but … the sooner that we can clear the decks of the bad events, the sooner we can move forward," says economic consultant Carl Tannenbaum. "Otherwise, the risk is you could continue to see the dominoes falling, one institution after another."

This week's burst of federal action is the latest in a long line of crisis-fighting initiatives. In 1933, Franklin D. Roosevelt established the Home Owners Loan Corp. to help homeowners in danger of foreclosure. In 1984, the Fed provided billions of dollars to halt a global run on the nation's sixth-largest bank, Continental Illinois. Fourteen years later, Fed officials gathered top investment bankers in a New York conference room to prevent the failure of hedge fund Long-Term Capital Management from becoming a global financial crisis.