Here’s an excerpt from an excellent Wall Street Journal Opinion column by Harvey Golub, former chairman and CEO of American Express: (this part is actually the end of the piece)
How can we tell if Congress begins to understand its role in causing the problem and what it must do to help solve it? Here are some signs:
– If Congress passes a stimulus package that simply gives people money — like this year’s $168 billion stimulus package, which was mostly rebates — they don’t get it. Rebates will not stimulate the economy and will not solve the underlying problem.
– If Congress tries to “help” the people who cannot afford the house they are in, be assured that we are wasting money and delaying the recovery. (Banks can decide better whether to foreclose or make a deal far better than any governmental entity.)
– If Congress forces the Treasury to provide cheap equity to companies which are solvent, or to automobile companies because of the debt owed unions in a politically important state, or if it continues with politically motivated spending, all of us will suffer a long and deep recession.
– If Congress raises marginal tax rates and erects trade barriers, and makes it easier for unions to organize without secret ballot through “card check” legislation, then the recession will be even longer and deeper.
It is my belief that comparisons between the current crisis and the Great Depression are generally overblown. However, if Congress does indeed do these things and meddles where it shouldn’t, we could find ourselves back in the 1930s.
The full column here: http://online.wsj.com/wsjgate?subURI=%2Farticle%2FSB122584345511799173-email.html&nonsubURI=%2Farticle_email%2FSB122584345511799173-lMyQjAxMDI4MjA1NTgwNDUzWj.html