Lower interest rates...is this the answer?

As investors ran out the door today, pulling their money out of potentially volatile investments and investing their money in Treasury Bonds, (pretty much the safest investment option), I wondered how J.M. Keyenes, as an investor on Wall Street, would have reacted to today’s events. Would he have surged for the door with the other investors to safety, would he have stayed put hoping things would get better, or would he have taken his money out completely to start, buy a few things hoping to stimulate the economy, and then finally, enter back in when interest rates were lowered? While currently the economy is still volatile, Keyenes would have probably chosen a response to the response to stressful economic times by taking actions that would work towards stimulating the economy. Like other investors, he would have ran to the door too, to ensure that once the economy settles, he has money to re-invest. However, to be a successful economy, especially in these tough economic times, the private sector and public sector must meet half way to help each other out. In the most stressful of economic situations, Keynes (as perhaps a member of the Federal Reserve) would suggest decreasing the interest rates due to "an abundant supply of savings" as it would be "very much in the national interest"(131). He believes that interest rates should not be lowered if there is a deficient supply of investments, i.e. on desirable purposes on which to spend the savings" (131). So if Keynes was a part of the Fed today (as well as an investor), what may he suggest in terms of interest rates?

After reading an article today, on the NY Times, Policy Makers Keep Key Rate Steady, the Federal Reserve has decided not to lower interest rates as they see that interest rates have little to do with the economic trouble today which has been induced by the credit and mortgage crises. Therefore the problem today is a confidence-in-the-market issue, not necessarily a liquidity issue (like it was during the Great Depression). The Fed has been helping out the market by injecting cash into it, like $50 billion yesterday to ensure the rate stayed near two percent. Although I am no expert, if this is a confidence in the market issue, I think the Fed should focus on giving investors reasons to jump back in, rather than to wait it out. Just injecting the economy with cash does not necessarily give good and obvious incentives for investors to reinvest, not yet, at least …they are still too hesitant. Perhaps this is just a short/long term dilemma that will sort itself out eventually. The economy, though it fails us at times, benefits us all in the long-run. All of this being said, I now wonder what Keynes would have done had he been here as both an investor and as a member of the Fed.