Why all those Great Depression analogies are wrong. - By Daniel Gross - Slate Magazine

Why all those Great Depression analogies are wrong. - By Daniel Gross - Slate Magazine: "The specter of the 1930s has also been deployed by political leaders to create a sense of urgency. 'We saw a lot of overblown analogies in the run-up to the passage of the bailout bill,' notes Dean Baker, co-director of the Center for Economic and Policy Research in Washington, D.C. President Bush's Sept. 24 address to the nation warned that 'the entire economy is in danger,' and that 'without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold.'"

*Sigh*. Why do we keep falling for this stuff? "Iraq is going to nuke us." "We're entering another depression." Shoot - why not add: "We're all going to be under 3 feet of water due to Global Warming if we don't start using compact fluorescents."

Everybody calm down! This will automatically get better as businesses deleverage themselves from the crazy 30:1 place they were at. And as a true accounting of all of the bad loans is made.

It just takes time. In the meantime, the Fed has pumped $4 trillion dollars into the economy. The total amount of economic activity is only $13 trillion. I'm not sure if that translates into 25% inflation but it's possible. I think they are just making things worse.

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