QotD: Don't panic (yet)

No matter how many times you'll hear it said over the next several awful days in Washington, this is not a binary choice between Henry Paulson's re-regulatory bailout and Great Depression 2.0. The 1930s will never happen again, thanks to a whole host of innovations and insights over the past seven decades. And even though the current mortgage-backed securities crisis is undeniably beginning to leak out from Wall Street, I'll reserve the kind of panic Bush seems eager to foment until maybe the economy actually stops growing, unemployment actually gets within shouting distance of Reagan-era levels, and the stock market does something scarier than fluctuate a whole lot.

As the participants in our June 2008 roundtable on the economy (including Donald Boudreaux, Ron Paul, and Megan McArdle) repeatedly pointed out, the one thing that may speed and deepen a so-far-nonexistent recession into something worse is the same kind federal overreaction that put the "great" in the Great Depression in the first place. I would have thought we'd all learned our lessons since then, but tonight's speech really hit home that it's no longer safe to take for granted any market literacy whatsoever.

Matt Welch, "The Four-Paragraph White Flag", Hit and Run, 2008-09-24