The Wall Street Journal is reporting this afternoon that the Treasury Department is mulling the expansion of its bank equity purchase program to cover insurance firms. And other firms in other industries, including non-financial companies, are also asking be included. It should just say no to these ill-considered ideas.

The program, begun by the Treasury Department two weeks ago when it purchased major stakes in the nine largest U.S. banks, was from the beginning touted as an exceptional response to an exceptional situation. Not only did bank failures threaten a systemic collapse, but – U.S. policymakers argued — actions by European governments to support their banks raised the prospect of a flight of capital from the U.S. if we did not act. Even so, the bank equity program raised significant dangers.

Now Treasury may compound those dangers by extending equity purchases to the insurance industry. Yet – although several insurance firms are doubtless in financial trouble – the risks posed are very different. There’s little pressure from overseas, and the systemic risk, by most accounts, is less than banks (or AIG for that matter). And there are complications involved in insurance not present in banking. Many insurance firms are still mutually owned, for example – meaning that there are no “shareholders” in the usual sense. How would equity purchases in such firms even be structured?

The proposed expansion of the program also raises disturbing questions about how many more industries the program will be expanded to include. Today’s Wall Street Journal report, in fact, raises the prospect that the auto industry may be among those next in line for federal stock purchases. Like little chocolate donuts, policymakers seem to be finding it difficult to just have one. Banking seems no longer a special case – with officials continuing to chomp until the whole box is gone.

We cannot afford the stomachache such government action will give the economy, and the market system. Treasury should just say ‘no” to this temptation.