Let's not forget another traditional source for Official Reassurance, The Economist. There's a pretty white-knuckled quality to the following, from the current issue (Sept. 19-25):
A study of the 1930s offers rather little comfort in 1998. It shows how much damage bad policy can do, and how fragile economies can be. The policies of those years now seem grossly mistaken, but that was not obvious at the time, and every age has its own flawed orthodoxies. Indeed some rationales for bad policy in the 1930s have echoes in todays debatesthe need for fiscal austerity to 'restore confidence', the 'moral hazard' argument against extending assistance to countries in financial distress, and so on. But the best cure of all for complacency is to reflect on the fact that banks, the crux of what went wrong in the 1930s, are still causing mayhem 60 years on, and regulators havent yet worked out what to do with them.
Carl Remick