Saturday, September 20, 2008

0 To $1 Trillion In 4 days Flat

It's fascinating to watch how easily consensus is manufactured. A few days ago elite opinion seemed to be cheering Paulson's "no bailout" line, and now they're cheering a trillion bucks thrown down the crapper. All the Very Serious People will spend their days coming up with their pony plans, oblivious to the fact that the pony plan is not an option. The Bush administration's plan is the option. We've seen this game played before.

It's unrealistic to imagine that I'd be able to really get enough honest information to have an informed opinion, but I spent some time thinking about what question all the Very Serious People should, at a minimum, want answered before the start cheering on pony plans. This is what I came up with:

What changed between Monday and Friday? What new information did you have at the end of the week that you did not have at the beginning of the week which caused you to go from $0 to $1 trillion?

And, no, tumbling stock prices or babble about "deteriorating credit conditions" don't count. Bernanke, Paulson, the SEC, the FDIC should have had access to a set of facts independent of day to day market turmoil. What actually changed over the week? If it was new information, what was it? If it was newly discovered information, why didn't you know it before?