I guess this thread is sort of winding down, but to give an answer 
that is more directly tied to David Colander's original question, I 
would note that indeed the idea of macroeconomic declines being 
largely due to declines of investment following collapses of 
financial institutions following collapses of speculative bubbles was 
indeed a widespread view in the nineteenth century, arguably the most 
widespread theory of "business cycles" extant at the time, including 
by some who believed in Say's Law, with this being a sort of early 
version of a Fisher-Minsky-Bernanke financial fragility model of 
macro fluctuations.  In any case, both Minsky and Kindleberger were 
aware of the following quotation from John Stuart Mill, which lays 
the front end of it out (1848,  Book II, Chap. 9, Section 3):

     "The inclination of the mercantile public to increase their 
demand for commodities by making use of all or much of their credit 
as a purchasing power depends on their expectation of profit.  When 
there is a general impression that the price of some commodity is 
likely to rise from an extra demand, a short crop, obstructions to 
importation, or any other cause, there is a disposition among dealers 
to increase their stocks in order to profit by the expected rise. 
This disposition tends in itself to produce the effect which it looks 
forward to ---a rise of price; and, if the rise is considerable and 
progressive, other speculators are attracted, who, as long as the 
price has not begun to fall, are willing to believe that it will 
continue rising.  These by further purchases, produce a further 
advance, and thus a rise in price, for which there were originally 
some rational grounds, is often heightened by merely speculative 
purchases, until it greatly exceeds what the original grounds will 
justify.  After a time  this begins to be perceived, the price ceases 
to to rise, and the holders, thinking it time to realize their gains, 
are anxious to sell.  Then the price begins to decline, the holders 
rush into the market to avoid a still greater loss, and, few being 
willing to buy in a falling market, the price falls much more 
suddenly than it rose.  Those who have bought at a higher price than 
reasonable calculation justified, and who have been overtaken by the 
revulsion before they had realized, are losers in proportion to the 
greatness of the fall and to the quantity of the commodity which they 
hold, or have bound themselves to pay for."

Barkley Rosser