Hey, I said if you accept the figures at face value, and I even went and said I basically don’t. Like you, this is the only mention I’ve heard of it, and it’s a third hand account of a Democratic congressman quoting anonymous top-level Federal Reserve guys to boot. Plenty to be suspicious about.

And indeed, it sounds more and more like said congressman was talking out of his ass.

Moreover, AGAIN, the $5.5 trillion figure is associated with that particular one-day event. It doesn’t justfify the actions of the following two months because those $5.5 trillion were not at stake during those two months.

We certainly are expending a great deal of energy on a matter where we differ only in intensity of meaning.

Say, if in handicapping whether or not to pledge a trillion dollar bailout, the risks look like 55% it will do nothing one way or the other, 35% it will help, 10% it will make much worse.

And the “do nothing” option is a 5.5 trillion dollar evaporation in the United States economy. “Will help” is “avert or greatly lessen”. And “much worse” is “we’re all back to spearfishing”.

Going balls out to hit anything but that 10% chance of the global economy, in a day, returning to 1918 levels makes a certain degree of sense.

As a general rule, I tend to frown upon panic-based policy. I guess that’s just me being one of those Conservatives Of Temperment that are all the rage these days.

That said: we worry about what it would look like if all United States debt to the Chinese and whatnot suddenly got called in. Well, a 5.5. trillion bank run would pretty much rate, and then some. That’s pretty much, once all the aftershocks play out that first week, the equivalent of defaulting on half of our GDP.

Panic mentality might not be out of bounds, again, if you take that not even at face value, but at ballpark value.

And it’s irrelevant, anyway, where the subsequent congressional actions are concerned. I’m not complaining about the fed’s decision that day to shut down the market for twenty-four hours; I’m complaining about the nonstop preemptive panic mentality since.

I’m not sure how much I trust any of the specifics of this, but I do buy that the Fed believes they averted a massive run on the banks, and probably did to some extent. That said, if their guesses are even in the ballpark of being accurate, that would have to lead even the most diehard ideologue to rethink things a bit. At that point, you’re not talking about “maybe we need to have a bad Recession to teach us a lesson”, you’re saying “Maybe the world economy needs to collapse and civilization as we know it be fundamentally kicked in the nuts so a new, better system can arise, Phoenix-like, from the ashes, and just hope that that new system isn’t basically the same as the old one or doesn’t just suck in some all new way”. I can almost get there, but at that point you’re talking about a helluva lot of human misery for the sake of economic freedom. You’re running into Fight Club territory.