Another Day Another Dollar

Is there enough fear out there after the Fed moved in to stop the rot at mortgage meltdown victim Bear Stearns?

Sure, I’m scared. Who wouldn’t be?

But the job of the Fed is to act as the banker of last resort and stop the spiral of credit contraction. And that is what it did over the weekend when it gave away Bear stearns to JPMorgan Chase for a couple of cents on the dollar and a bunch of guarantees on Bear Stearns’ “dark matter.”

It was the failure of the Fed to do that in 1929-1933 that made the Great Depression a ten-year vale of misery.

Larry Kudlow is confident. But then he always is. He commends the Fed for doing the right thing. But then he takes a shot at the Democrats.

Senator Schumer is calling Bush "Herbert Hoover." But Hoover signed protectionist Smoot-Hawley, just as Hillary and Obama are today trying to break up NAFTA. Hoover signed a huge tax increase, just as Hill-Bama are preaching. The Dems are emulating Hoover. Bush is trying to stop it.

That’s a very important point. Herbert Hoover made the first mistakes that made the Great Depression “great.” He let the banks collapse, he jawboned business to keep prices and wages up, he signed the Smoot-Hawley Tariff Act. He increased tax rates You could read it all up at Stuck on Stupid.

Democrats really have never learned the lessons of the Great Depression. They think that it was the genius of FDR that got us out, with the NRA, Social Security, the Wagner Labor Act, and TVA.

On the contrary. All those policies made the Depression worse.

If they try the same policies again then the American people will suffer greatly.

That is you and me.