Pray to A. Smith

On Sunday’s television news shows, Treasury Secretary Timothy Geithner said, “I would not spend a penny on helping a bank for the purpose of helping a bank. Everything we’re doing is for the people that depend on this financial system. Every time we provide assistance to the financial institutions, it’s only because we need them to do a better job of getting credit to help reduce the risk of a deeper recession.”
Earlier, he also said, “the market will not solve this.”
The latter comment is the key to the aggressive tactics Geithner has ad-vocated along with form-er treasury chief Larry Summers, Fed Chairman Ben Bernanke and President Barack Obama.
While critics continue to decry the hugely expensive federal stimulus program and equally expensive industry rescue packages, the only alternative they have offered relies on massive tax cuts and blind faith that everything will turn out OK.
Blind faith, that is, in market forces that Sec. Geithner, Summers and Bernanke refuse to trust.
Chairman Bernanke is the leading authority on the Great Depression and the role that frozen credit combined with a virtual shutdown in international trade caused in part by the erection of tariff barriers and import/export quotas played in that devastating downturn.
The Great Depression lasted from 1932 until 1938 and many believe it would have continued had it not been for the stimulus created by the beginning of World War II.
That’s the speed at which “the market” worked then. Sure enough, the depression ended and recovery began — but not until un-employment reached 25 percent, most cities had set up soup kitchens to prevent mass starvation, women in the Midwest sewed up feed sacks to make dresses for themselves and their daughters, thousands of banks failed, manufacturing ground to a halt, farmers beyond numbering lost their homes and their land and a great war began.
It is precisely because the administration’s economic team is convinced that the danger is doing too little rather than too much that they are asking Congress to give them the tools to engineer a turnaround within the next two years. They want to throw tons of money at the problem because they believe that is the surest way to prevent the current recession, now well into its second year, from becoming another castastrophic depression.
The alternative to their bold initiatives is to stop borrowing, stop spending, stop regulating, stop meddling and depend on the gods that let the country tumble into that deep, deep depression 77 years ago to do a better job this time.

— Emerson Lynn, jr.