Rep. Paul Kanjorski describes what exactly prompted the Wall Street bailout last September. These guys should be more forthcoming with the details. Here's the most riveting part of what he said:
On Thursday at 11:00 a.m. the Federal Reserve noticed a tremendous draw-down of money market accounts in the U.S., to the tune of $550 billion was being drawn out in the matter of an hour or two. The Treasury opened up its window to help and pumped a $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn't be further panic out there.
If they had not done that, their estimation is that by 2:00 p.m. that afternoon, $5.5trillion would have been drawn out of the money market system of the U.S., would have collapsed the entire economy of the U.S., and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it.
I think the Congressman goes too far with the last line about our political system, which has survived a lot worse over 200 years. But this account give us a window into to scale and speed of the financial crisis that was defused by the aggressive steps taken by the Federal Reserve, Congress and the Treasury. And that should moderate some of the ex post facto complaining about the mistakes made in trying to manage a serious emergency.