I’ll say that I largely agree with you. Given what happened in September/October 2008, the Fed pumping lots of temporary liquidiy into the economy was the right choice at the time, and probably saved a great deal of pain.
I think Paulsons role was villainous and the primary impact TARP was to save the jobs and fortunes of Paulson’s friends instead of propping up the general economy, but the Fed did what had to be done in the short term.
The Feds role in allowing the housing/credit bubbles in the years leading up to the crises is more questionable, but even in that respect there are bigger villains.
So creating new bubbles is the way to fix the old bubbles bursting?
I agree as well that this was a good choice. If you look back at the situation we were in on Dec 16, 2008 and compare to where we are now, instead of well into Great Depression II we are on our way to recovery.
And I think that Bernanke, as a student of the Depression and the mistakes that were made then, was just the right man in just the right place.
We were also lucky that Pres Bush is not someone who is paralyzed by doubt and unable to commit to a decision for fear of making a mistake, unlike some other Presidents I could name...