As millions of American homeowners confront falling house prices and record foreclosures, it’s hard not to be troubled by the Federal Reserve’s extraordinary role in orchestrating the rescue of Bear Stearns this week.

To many on main street, it looked like the Fed helped Wall Street avoid paying for its mistakes. After all, Bear Stearns played no small part in fuelling the credit crisis that brought it to the brink of bankruptcy last weekend. It seemed like rough justice to bail out Bear before throwing homeowners a lifeline.