I'm all for the Federal Reserve coming to the aid of the economy by reducing interest rates and expanding the money supply; but by saving ailing brokerage The Bear Stearns Companies, Inc. (NYSE/BSC), I believe the Fed went too far.

The United States is a free market system, and when the government intervenes in that capitalistic based society, inequalities are created.

Last week, the Fed came to the rescue of Bear Stearns by back stopping a loan that JPMorgan Chase & Co. (NYSE/JPM) made to Bear Stearns. "Back stopping" basically means that if JPMorgan loses the money it lends to Bear Stearns, the Fed will cover Morgan's loss so Morgan is not out of pocket.

Two days ago, we learned that JPMorgan is now buying Bear Stearns for the ridiculously low price of two hundred and thirty-six million dollars, which equates to less than half of the market value of its New York headquarters located on Madison Avenue. JPMorgan's market valued skyrocketed by $12.0 billion in one single session on the news because the market knew that JPMorgan got a great deal. Meanwhile, billions of dollars were wiped out in Bear Stearns' value. It was the deal of a lifetime for JPMorgan. If only old Pierpont himself was around to see this one.

Would JPMorgan have gotten this good of a deal if the Fed had not interfered? I don't believe so. With this deal, JPMorgan acquires a prime U.S. broker with 14,000 employees. The JPMorgan deal was completely unfair to the shareholders of Bear Stearns, whose stock traded as high as $50.00 in 2007. JPMorgan is proposing to buy the company for $2.00 a share. The public be damned again — and this is why I don't like the Fed interfering in a free market system.

The Federal Reserve should stick to what it does best and let Wall Street pay for its own mistakes. And doing what it does best is exactly what the Fed did yesterday when it lowered its key federal funds rate by three-quarters of one percent to 2.25%.

Interest rates have been cut by the Fed six times since last summer. So far this year, the Fed has reduced interest rates by two full percentage points.

I believe that Ben Bernanke is doing a great job at cutting interest rates to spur the economy. And the stock market loves it. As the Fed slashed interest rates yesterday, the stock market had its biggest rally in five years.

As I wrote in my column on Monday, the stock market says that the economy is not as bad as it seems. If you were the stock market, wouldn't you be thinking that no matter how bad it gets, no matter if a major U.S. stock brokerage is going bankrupt, the Fed will bail everyone out? Well, that is exactly what has happened so far. Have no fear, the Fed is here.