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If zero-percent financing were a panacea, Detroit would be booming. Free money hasn’t helped the automakers. But maybe, just maybe it’ll save the economy.

My favorite quotes these days are from economists crowing about how the Fed is using every weapon at its disposal to prop up the economy. Trouble is, the Fed is kind of like Poland’s cavalry going up against Nazi tanks in September 1939.


We know how well that turned out for the Poles. Not so good for the Nazis in the long run, either. But they managed to do a hell of a lot of damage in a few short years before anyone figured out how to overpower them.

You’ll be fine. That’s the soothing advice a parent gives a 4-year-old who bangs his head on a coffee table. I would expect a little more from the leader of the free world, but that seems to be the basic White House message on the economy.

It’s technically correct that we “got through” the Depression. But it wasn’t because Americans elected FDR to be cheerleader-in-chief. It’s because FDR threw hundreds of ideas at the problem. Right, and then we fought a big war.

The bailout clearly isn’t going to be the end-all and be-all of too many economic crises on this planet. Nor is another interest-rate cut going to do the job. Haven’t we already had several hundred of those in the last decade?

If the crisis is truly one of confidence, then no technocratic solution will work. And nor will jawboning about giving those technocratic solutions more time to take effect. It’s ironic that a president who prides himself on taking action is now reduced to words in support of other people’s actions.

It’s stressful, no? Maybe we all could use a retreat to a nice spa, not just the frazzled execs at AIG.

If something is too big to fail, shouldn’t it be completely part of the government rather than lie in some netherworld between the public and private sectors? That’s the only question worth asking in light of the Fed’s proposed bailout of our two big mortgage giants, Fannie Mae and Freddie Mac.

What also seems odd is the constant reassurance from figures of authority that nothing is really wrong, that Fannie and Freddie don’t really need any money from the Fed. Then why all the fuss and bother?

At some point, someone in power (and their enablers) will have to start reading from a reality-based playbook. How else do you explain the large number of people who believe the country is on the wrong track and the large number of pundits and commentators who insist everything deep down is really OK?

Maybe Phil Gramm was right. Or maybe, just maybe, if you start to think about it, just for a fraction of a second, as crazy as it may sound and despite all of Gramm’s degrees and years in public life, he has no idea what he’s talking about. He just wants questions about the economy to go away.

Now that sounds like a reality-based playbook for a presidential campaign in 2008.

So, next time someone offers me $2 for something soon to be worthless, I’ll cry and moan and argue for $10 instead.

That seems to me to sum up the complaints coming from Bear Stearns shareholders. I suppose it wouldn’t really matter, except that the Federal Reserve is underwriting the deal to the tune of $29 billion. So much for the free market and the concept of risk.  In today’s world, all the risk is being shafted shifted to the individual, away from corporations. Get used to it.

That about sums up the Fed’s surprise move this morning. A cut of 75-basis points to short-term rates. Only 350 basis points to go before we hit zero. Then they’ll have to start paying me to borrow money. I’m looking forward to that as I have a long list of home-improvement projects.

On another note, it’s wonderful to see John Edwards devote his life to ending poverty. But it seems to me he would be better off doing something other than run for president. His plan will take 30 years. He’ll be president for eight at the most. But I don’t think he’ll get that far. If a Democrat wins in November, Edwards would make a solid, roll-up-his-sleeves head of of Health and Human Services.