If we were going to face the conditions which might trigger another Depression, we couldn't pick a better man to possibly prevent it than Ben Bernanke:

Bernanke is particularly interested in the economic and political causes of the Great Depression, on which he has written extensively. On Milton Friedman's ninetieth birthday, November 8, 2002, he stated: "Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve System. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."

On a less serious note, can anyone Paul Krugman says is Satan be all bad?

I'm inclined to take another look, and I want to be fair. (It's the least I can do; especially because being fair is supposed to be one of my rules.) Like Professor Bainbridge I can change my mind. Who knows? there might be virtue in waffling right now.

Bernanke thinks that the government might not only be saving the economy by this bailout, but getting a good deal:

Bernanke said there is plenty of blame to go around for the current crisis, as he named Wall Street firms and banks that underestimated risk of the securities they were creating, rating agencies and regulators.

But he said the primary problem is a drop in home prices, which sparked a rise in foreclosures that have cut the value of trillions of dollars of mortgage-backed securities to what he termed "fire sale" prices.

The lack of demand for those securities, in turn, forced banks and Wall Street firms to take $500 billion in charges that dug into the capital they use to make loans.

Bernanke said that when the government starts buying the mortgage-backed securities from the banks, it will provide a market that doesn't exist now, and allow the prices to rise from the current depressed levels to ones more justified by the fundamentals of the loans, most of which are not in default.

"I realize it's a very complicated story," Bernanke said. "The bottom line, though, is banks are holding all these complex hard-to-price securities and their capital is low. Those two things together don't allow them to make adequate loans. This approach is one way to address the problem."

And he stressed repeatedly that while the Treasury Department plans to spend up to $700 billion buying the securities, it can expect to recoup most if not all of that money by selling them at a higher price later on, once markets have stabilized. He argued that doing nothing would cause the economy to slow so much that there would be a bigger hit to tax collections than the program will eventually cost taxpayers.

Bernanke said he expects most of the securities will be bought through a reverse auction, in which holders would offer them for sale and the government would buy those offered at the best price.

Maybe all the political hotheads (including myself) should try counting to ten, and at least listen to him. He might just be worthy of our trust. If he is worthy of our trust, and he turns out to have been right, it would be a tragedy to ignore him simply because there's an election and everybody wants to win. (I think it speaks highly of McCain that he suspended his campaign, btw.)

Earlier today, I did not hesitate to embrace the third rail. If I can do that, I see no reason why I can't occasionally waffle too.

And if the economic collapse of the United States isn't worth waffling over, then what is?

MORE: Please forgive the sloppiness of my thoughts and the spontaneous way I may have presented them here. It's late at night, and I probably shouldn't be writing a blog post. But I think this is damned serious.

AND MORE: For more on why this might not even be the bailout it's said to be, read The Paulson Plan Will Make Money For Taxpayers." It's fascinating, and here are former hedge fund manager Andy Kessler's conclusions:

.... it is possible, all in, for this portfolio to generate between $1 trillion and $2.2 trillion -- the greatest trade ever. Every hedge-fund manager will be jealous. Mr. Buffett is buying a small piece of the trade via his Goldman Sachs investment.

Over 10 years this could change the budget scenario in D.C., which can also strengthen the dollar. The next president gets a heck of a windfall. In the spirit of Secretary of State William Seward's purchase of Alaska for $7 million in 1867, this week may be remembered as Paulson's Folly.