There is an argument that even if the Paulson plan is terrible (and it is!) there simply has to be some kind of bailout.  This argument relies heavily on dire warnings of complete financial collapse and comparisons to the Depression.  When you get down to it, this is economic apocalypticism, and it is not necessarily any more well-founded than any other kind of alarmism, whether it concerns terrorism (“existential threat”!), climate change (the world is ending!) or foreign threats (the new Hitler!).  Economic 1929-ism today is no more persuasive than foreign policy 1938-ism.  The federal response after the 1929 crash was consistently, awesomely wrong in the direction of reducing the money supply and intervening more in the economy.  You cannot have the sort of prolonged economic contraction that took place in the 1930s without repeating all of the mistakes of Hoover and FDR.  

Resistance to alarmism always provokes the same response.  Skeptics and critics of alarmism are dismissed as trivial and silly people, unserious and unfit to participate with the great and the good in promoting their disastrous “solutions” to the problems they have hyped.  We have seen this time and again from both sides of the spectrum.  If you opposed the PATRIOT Act, you did not care if terrorists killed small children in their cribs; if you questioned the wisdom of the Kyoto Treaty’s provisions, you hated science and wanted the planet to be destroyed; if you doubted that a third-rate dictatorship on the other side of the world posed a threat to the United States, you loved despotism and genocide; above all, you were not one of the serious people who bought into the alarmism and thereby automatically disqualified any arguments you might make.  The new story seems to be that if you do not think the government should save certain banks from their own mistakes, you are the political equivalent of Tyler Durden dreaming about obliterating the economic life of this country.  I don’t know whether alarmists are simply overwhelmed by fear and blinded by assumptions that may well be badly mistaken, or if they earnestly, truly believe in their warnings, but we have already lost too much to political panics in the last decade.  I am not inclined to believe the latest batch of alarmists who once again clamor for us to give them vast powers and ask as few questions as possible.