Be Concerned, Be Very Concerned

There's no sight like hindsight.

It took a year to acknowledge, but the Bush Administration finally agreed a few weeks ago that we have been in a Recession since December 2007. And while I say we're already there because of surging unemployment, locked credit markets, and now deflation, the Bush Administration is beginning to talk a Depression if we don't bail out the Big Three automakers. Even VP Cheney says it'll be "Herbert Hoover time" if we don't bail out the Big Three.

So D.C. lawmakers, the White House, and the United Auto Workers worked out a deal for $13 billion in bail-out funds for the Big Three, and Congress passed the bill convincingly. The Senate was about to pass it too, but then Senate Republicans decided to hammer on the UAW a bit, got the concessions they asked for... but then decided to ask for MORE concessions, at which point the UAW balked. And so the bill didn't pass. And thus the Republicans could blame the collapse of the Big Three on the Unions, which is what they wanted all along.

Which brings us to another Great Depression. John Judis of The New Republic has this quick little history lesson for us:

If you look at the history of the Great Depression, what tipped that event from a global recession to depression was precisely a series of dumb, craven -- or in Keynes' word, "feather-brained" -- moves by politicians blinded by ideology or by narrow self-interest. An interest rate hike here, a balanced budget there, a spending reduction or two, and we went from ten to twenty percent unemployment. Don't imagine for a moment that the failure to bailout the auto companies isn't one of those feather-brained moves.

There's more to read at TNR if you dare...