Ezra Klein said this when I saw him last night, and I don’t have a good answer:
Why haven’t we simply shut down the stock market until we can draw up an appropriate recapitalization program and implement it? There would be plenty of precedent. FDR shut the markets down in 1932. Bush shut them down after 9/11. I guess it’s possible that the market would drop sharply on the day it reopened, but if the plan was sound (and given some time to build a plan — time that would be provided by a closed market — you’d have a higher chance of that), and the government had already demonstrated that sort of seriousness of purpose, it’s hard to why the markets would be more freaked out than they already are. What am I missing?
Is there a real reason here besides an ideological aversion to heavy-handed measures and a pollyanish desire to insist that everything’s all right? It seems logical enough to say that if we’re going to have an emergency intervention in the marketplace that we can take a “time out” from the stock market to give people time to put the plan together.