But I think that significant intervention was warranted.  Nobody wins in an unchecked chain reaction of bank failures.  To do nothing would have been tantamount to letting a house fire burn itself out-- the whole building would have been destroyed.

Doing nothing would be preferable to calling on the arsonists who started the fire to help put it out.  When the stock market crashed in 1929, the government's intervention turned what would have been a recession lasting for one or two years into a decade-long depression.  By contrast, nothing was done about the crash of 1987, the sky didn't fall in and the economy didn't shut down.  On the contrary, the next ten years saw unprecedented economic growth.  To do nothing would allow the market to fix itself.

Regards,
Scott Perry