If Wall Street is to be believed, we are so screwed.

The House nixed the bailout bill -- and notwithstanding MarketWatch economist Irwin Kellner's ludicrous objections, "bailout" is definitely the right word -- and the Dow dropped nearly 778 points, an unfortunate record. The S&P 500's fall was, at 8 percent, even steeper. But is the sky really falling on Main Street? The answer, of course, is it's impossible to say.

The logic of the bailout, as explained by Treasury Secretary Henry Paulson and his acolytes, is that credit markets will "lock up" -- banks, they say, will become afraid to make loans to anyone, for anything. The contagion, they insist, will spread well beyond over-priced real estate. Bank of America CEO Kenneth Lewis says it's already happened. "The inability of investors to price many of these assets has resulted in a blockage of liquidity -- no one is willing to buy or sell anything," he wrote in the Wall Street Journal. "The result is less credit to buy homes, cars or other large-ticket items, followed by further declines in home prices, reduced production of goods, shrinking economic activity and rising unemployment." BofA, he says, has "seen an increase in commercial clients of other banks coming to us with urgent credit needs, saying that their other banks are cutting off or repricing lines of credit."

But is that really true? In my own experience, I've found that it's very difficult to get an accurate sense of the overall lending picture. Back in the spring, I reported a story for Inc.com about a sharp decline SBA lending, and I struggled to establish the economic context. It was all very confusing: on one hand, there was plenty of anecdotal evidence that small businesses were finding it harder to get credit -- surveys of bank officers conducted by both the Federal Reserve and a trade association for SBA lenders found that they were tightening the spigot. Yet lending data from both the Federal Reserve and FDIC suggested otherwise, at least to this untrained eye, and in January a Federal Reserve Governor told Congress that "commercial loans at small banks continued to expand at a rate of almost 12 percent in this year’s first quarter," which "suggests that credit is generally available, albeit at a higher cost." And at the time, a survey of small firms by the National Federation of Independent Business found that financing concerns remained a low priority.

Of course, that was then -- and the data at issue in May is now as much as nine months old. Still, the contradictions remain. This evening, National Public Radio interviewed three small business owners across the country on their own worsening credit environments. The car dealer in Boston reported that customers are finding themselves shackled by more onerous loan requirements. Sales, he said, are down 25 percent this year, though he didn't clearly link that to evaporating credit, as opposed to a difficult economy generally. A contractor in Louisiana reported that it was no longer easy to buy heavy equipment on credit. And a pet supply store owner in Washington, DC, said that her credit line (from, ironically, Bank of America) has been reduced, making it harder for her to buy inventory.

Yet last Friday economist Allan Meltzer of Carnegie Mellon University confirmed what I had found last Spring. "First of all, firms are lending money," he told NPR's Morning Edition. "If you look at what the Federal Reserve publishes, as opposed to what they're saying, commercial and industrial loans have been going up all year. They're not going up fast, but they're going up."

None of which suggests that a credit lockdown has already arrived, as the most pessimistic prognosticators have proposed. Indeed, immediately after the interviews with the entrepreneurial trio, NPR's Adam Davidson allowed that "I am finding it hard to find economists who echo [the most dire warnings], from the left, right, and center. I think everyone agrees this is very serious crisis, that it would be good for something to happen to lesson it," he continued. But "I am finding a lot of people who say this will right itself -- this is what markets do."

And so maybe it's time for all of us -- but especially members of Congress -- to take a deep breath, and develop a rescue package that does more than stabilize Wall Street and hope that the benefits trickle down to Main Street.

In the meantime, to those who celebrate them, Happy Holydays.