what Sam Spade thinks would have happened if we had just let everything fail.
Thought I told you before on this front:
1) I would have examined the books of every troubled institution before deciding whether they failed or were backed up by government (akin to what FDR did), so that we actually knew what we were playing with (which, btw, we still have no idea - that makes confidence in the system "impossible").
2) If their were "immediate" problems, such as with the money markets that nearly blew up, I would use government to back up those things. (but only temporarily)
3) If, after examination of all of the troubled institutions and determination that certain institutions must fail, there would not be, for example, enough lending capacity to handle the economy or other typical banking issues, I would have used the government money to create "banks" to handle these problems. These banks would only make quality loans to businesses and individuals, but would cover these impending failures. Over a certain amount of time, the lending institutions would be sold off privately.
You see, one of my biggest concerns is that, down the line, when the next wave hits, at some point government is not going to be able to back up everything and because of its prior actions, will be unable to create safety nets for the collapse of all of these highly questionable institutions. That would be bad, really bad.
As for the result, it would have been quite ugly, I don't disagree. Worse than what actually occurred. But it would have been much better than what I suspect is awaiting us.