The Depression Of 2008? Don't Count On It

by Jason Zweig - September 30th, 2008 - Wall Street Journal

After the crash of 1929, when the Fed was still weak, years passed before the federal government could flood the economy with cash.

Today, however, the resolve of the Fed is not in question; nor is there any doubt that the Treasury Department is willing to provide the financing it takes to get the economy moving again. Furthermore, U.S. nonfinancial companies have just under $1 trillion in cash on their books. Even though Wall Street is dead, innovation is not: In the months to come, clever new financial go-betweens will spring up and find a way to get that cash flowing again. It's hard to see how a depression could get under way when so much capital is waiting in the wings.

The biggest concern we have is when government steps in to solve a problem. It is almost always the wrong thing to do. During the Great Depression, many actions by FDR and the New Deal prolonged and deepened the pain felt by the American people. That is my greatest fear about the current crisis. Not that government will fail to act. The converse is my fear, whatever government does will make things worse.

With George Bush as President and Nancy Pelosi as Speaker of the House, America has never had two more incompetent buffoons at the helm of leadership at the same time. I can not understand how anyone can look at these two and feel confident that a program they worked out together is something that we should actually do. I am encouraged that their bailout failed to get enough votes. Maybe we can find someone who deserves our trust to work out a good program. Their program was ridiculous.