Could the Bush Recession Turn Into the Bush Depression?

I don't know anyone who thinks we're not in a recession and I don't know anyone who says we're on the brink of a Depression. Most people have no reason to think we won't have a Depression; they just think "it can't happen here" or "now" or "to me." It shouldn't either. Nor should have George Bush. The most unlikely of morons to assume the presidency he's done everything that anyone could do to bring on a financial calamity. This morning's Paul Krugman column, Partying Like It's 1929, gets right to the point: right wing ideology is toxic. The "banking crisis of the 1930s showed that unregulated, unsupervised financial markets can all too easily suffer catastrophic failure." Krugman claims the hard-learned lessons were "forgotten" as the decades passed. I'm less generous.

To the laissez fairies of the extreme right Krugman's carefully regulated and supervised financial markets are communism. Anything that impedes absolute greed and selfishness in pursuit of the general good is treason. And along came Bush and his merry band of agenda-driven Mayberry Machiavellis.

Krugman is so logical and generous in his understanding of how markets work. I don't think he used the words "greed" or "selfishness" once in his column-- or even implied the base instincts behind them. But that is what has driven us to the brink of disaster-- and he knows it. He explains what made a garden variety recession of 1929 into the Great Depression of the 1930s and how society-- or at least the New Deal (imagine only 17 Republicans in the 1937 Senate)-- dealt with it. "And we all lived happily for a while-- but not for ever after."

Wall Street chafed at regulations that limited risk, but also limited potential profits. And little by little it wriggled free-- partly by persuading politicians to relax the rules, but mainly by creating a "shadow banking system" that relied on complex financial arrangements to bypass regulations designed to ensure that banking was safe.