Larry, there are a good many many things to debate about your post, but for now I think it’s worth stressing (and I think you’d agree with this) that the stock market collapse is not ‘just’ a panic (although it is that, certainly), it’s also in some part a (reasonably) rational attempt to price in the risk/certainty of a slowing economy. The problem, of course, lies in unravelling the rational from the irrational and, for that matter, in trying to understand how irrational and rational fears feed upon each other. As for the paper from the Minneapolis Fed, here is a fairly damning critique from one of the Economist’s bloggers, and then there’s this criticism from Mark Thoma, supplemented here by Professor Thoma’s analysis of recent St Louis Fed data and then by Towler Cowen’s commentary here. It’s not pretty reading. The sky continues to fall.