Posted by
Andrews on Monday, February 16, 2009 6:34:13 PM
I have been saying over and over that our current "crisis" doesn't even really compare to 1981-1982, much less the Great Depression, and a few others, notably Thomas Sowell, Walter Williams and John Stossel, have written similar arguments. However, a line from a
recent WSJ piece saying the same thing caught my attention:
The failure of a couple of dozen banks in 2008 just doesn't compare to
over 10,000 bank failures in 1933, or even the 3,000-plus bank (Savings
& Loan) failures in 1987-88.
That is interesting, as the S&L crisis, while costly, ended without destroying the economy, as did the 1981-82 recession. And though we did engage in the costly Resolution Trust solution to the S&L crisis, neither crisis required anything like the Bush or Obama bailout packages.
So what makes this "crisis" so "different" that we must throw money at everything under the sun? Or is it that we are so impatient we can't wait for the problem to resolve itself, and instead must make things worse, and waste a fortune, in a futile effort to make it end more quickly?
POSTSCRIPT
If you want to understand my frustration with the bailout schemes, wait until you get a cut. Rather than applying a bandaid and waiting, go to the bank and get a stack of $100 bills. Every five minutes burn one and hold the cut over the smoke. See how much more quickly it heals. That is what I see in all this talk of bailouts, illusory gains costing very real money.