Christina Romer and the rest of the staff at the Council on Economic Advisors have prepared an Economic Report of the Presidents which contains many charts and graphs. This one should finally make it clear that however much one may dislike “bailouts” in general or the specific way recent bailouts were structured, they have in fact succeeded in taking a very real credit crisis and ending it:
This is not the be-all end-all of recovery. If 20 percent of the people in your town are unemployed, 25 percent have had their hours cut, then all the available credit in the universe isn’t going to get you to take out a loan and expand your store’s operations. But it is necessary for recovery. Even in normal times, tons of people lose their job every month. It’s just that as business contract, other businesses are expanding. Financial panic creates a situation where it’s not possible for anyone to expand unless he’s already sitting on a giant pile of cash. Those days are not behind us and growth is not only possible but occurring. What we need now is more demand and faster growth—fast enough to bring unemployment down.