Europe and Asia see U.S. as no longer practicing what it preaches

Mario Monti, former EU competition commissioner, said the credibility of the market economy has been hurt.

In extending a last-minute $85 billion lifeline to AIG, the troubled insurer, Washington has not only turned away from decades of rhetoric about the virtues of the free market and the dangers of government intervention, it has also likely undercut future American efforts to promote such policies abroad.