I've already outlined my misgivings about this bail-out package, but there is one thing I haven't mentioned. If you put aside all the technicalities there is still the matter of the psychology of the economy.
Over and over I have heard that the ultimate goal of this bail-out operation in to "restore confidence in the market."
That means the project has the potential to be merely symbolic. This was the argument for passing it right away in it's original form: that it doesn't matter what the package contains, so long as it appears to be a big move that will "restore confidence."
But the market psychology is the sum of a nation of individuals. And right now, those individuals are protesting, and not embracing this operation with open arms.
So answer me this, can congress confidently say that this bitter medicine will restore confidence if the people to whom confidence is being restored don't want it?
I think whatever congress passes will have to make at least one large noticeable difference to prove its efficacy. Otherwise I'm afraid the market will remain sceptical. I know I will.
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