[yummyfajitas]

This makes prediction and counter-factual history for economic stuff really hard.

Exactly my point. We really have no idea what would have happened had the fed not intervened and allowed a normal bankruptcy to occur.

I'm not saying economists are lazy and stupid, I'm just saying they lack data, and that tatsuke's counterfactual (GDII) is not a very good one.

[tatsuke95]

>"We really have no idea what would have happened had the fed not intervened and allowed a normal bankruptcy to occur."

This is the fallacy: You really have no idea. That's not an insult. People who do this for a living, like, say, FRB economists, do know the consequences of letting bank runs occur and not providing liquidity during a crisis. It's well studied.