You’d have thought the world was ending.

When lawmakers in the House of Representatives voted down a proposed $700 billion bailout plan for Wall Street, investors ran for cover … and sent the Dow plunging nearly 800 points in the process. Partisan finger-pointing ensued, European investors briefly panicked, economic talking heads spouted doom for the markets … and then the markets regained more than half their losses.

But if you listened closely above the noise, you could hear a few reasoned, albeit quieter, voices repeating a simple message:

“Don’t panic.”

Let’s start with Rick Telberg, editor-at-large of CPA Trendlines, who recently surveyed hundreds of CPAs nationwide about financial planning in the wake of the meltdown. Among Telberg’s questions was, “Considering the current state of the financial markets and economy, what’s your best advice for individuals today?” There’s a definite trend in the answers:

• “Hold steady.”
• “Stay with your long-term goals.”
• “Don’t panic.”
• “Hold on and wait.”
• “Stand pat.”
• “Stay the course.”
• “Ride it out.”

You get the idea. There were a lot of other great suggestions about diversification, maintaining liquidity and trusting your financial plan. But it seems most CPAs seem to believe that (a) the markets will rebound, given time; and (b) sound, diversified financial plans will help investors weather the storm.

So that’s the take from an individual financial planning point of view. But what about the bailout itself? Is it panic or a reasoned response to the crisis? Many economists seem to support a bailout in some form as a necessary evil to protect our financial system.

But an opposing point of view surfaced on a recent edition of NPR’s “Talk of the Nation.” Economists there opposed the bailout but for different reasons, and expressed their belief that, given a little patience on investors’ part, the markets would right themselves.

• Devin Foley, director of development for the Center of the American Experiment, opposes government intervention of any kind, saying throwing money at the problem is like “giving the guy in AA a bottle of Jack when he’s having a bad day. You just don’t do it.”
• Dean Baker, co-director and economist for the Center for Economic and Policy Research, wasn’t quite as blunt, but he was equally opposed to the bailout. “If we’re going to create economic policy based on the ups and downs of the stock market, we’re really in trouble,” Baker said. “We are in trouble, no doubt about it. But the key problem for the economy is the collapse of the housing bubble. The financial stress that we’re seeing … is not that big a problem. (Politicians) have really misrepresented the proportions here.”

On other hand are those who believe the economy won’t begin to recover until the government frees up some money to support the financial system. “The only solution to the current crisis,” says NPR commenter Richard Leng, “is to protect the liquidity of the credit markets.”

Who’s right? Only time will tell. I tend to side with those who put the “free” in “free markets,” but what the heck do I know?

Let us know what you think. Will the bailout solve our problems … or make them worse?