Let's be clear: This is a Wall Street crisis, not a national economic crisis. The overall economy, while a bit weak, is still growing. Some politicians are comparing the current environment to the Great Depression. But in 1932, when the federal government last moved to bail out the banking sector, economic output had fallen 45 percent and unemployment was a staggering 24 percent. Today, economic output is actually up and unemployment is a historically modest 6.1 percent.
Thursday, October 02, 2008
A Chronology of the Mortgage Meltdown
(via Samizdata) Reason Online has an excellent primer on the roots of the mortgage crisis that got us to where we are today. This is the take-away I think is important:
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From: Ousizch
http://www.ecpassistant.blogspot.com
The primer is a fairly good summary of the events. McCain needs to explain clearly what he was doing on the reform bill, and that Democrats would not support it. Maybe John can explain this better on Tuesday night?
The naive part of the article is the thought the government can just sit back and let institutions fail left and right, with no consequences to the economy. The government's biggest mistake thus far was letting Lehman go into bankruptcy, rather than forcing an orderly merger into one of the banks.
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