The near-collapse of CIT Group (CIT), a commercial lender that historically specialized in loans to small- and medium-size businesses, is in some respects an all-too-typical tale of a company that got greedy and paid the price.

Once a distinctly unglamorous firm, headquartered in New Jersey and focused on prosaic business loans secured by equipment or receivables, CIT, under the leadership of former Merrill Lynch (MER) executive Jeffrey Peek, couldn't resist the siren song of high-margin subprime mortgages and student loans and the new, exotic debt products that swept the financial world in 2003-07.

When the credit crunch hit and it could no longer sell the bonds that it needed to fund its operations, CIT had nowhere to turn but the government. And after much wrangling, the government last week took a pass—leaving the Obama administration open to criticism that it's failing to do what it can to help small businesses.

It's very hard to assess whether "small businesses" would really suffer much if CIT went under. My company, as an example, is much too small for this sort of small-business lender, and my hunch is that many of CIT's clients are actually the large sort of small businesses that can probably find alternative financing. (By most definitions a "small" business can have as many as 500 employees.) As I've noted before, if you have collateral with a clear asset value, you can usually find someone to lend you money against it.

Further, CIT's "we're there to help the little guy" positioning rings hollow in light of the way the company got itself into this mess. Peek's strategy was to make the company more like the big-name investment banks, with fancy offices and advisory services and a broad portfolio of debt products, many of them far riskier (though far more profitable in the short term) than its traditional business. This, we now know, was a very, very bad plan.

Yet the juxtaposition of CIT's meltdown with the other big Wall Street news of last week—Goldman Sachs' (GS) blowout earnings—does give me pause about the government's management of the credit crisis.