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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.

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Set your hypocrisy radars on high alert. Just don’t expect anyone to reconcile the AIG bailout with the values of a government supposedly in thrall to the belief that the market is the ultimate arbiter of all that is good and true.

As we’re learning, the market can dish out some ugliness, too. But is it really a new lesson? Not for the workers who used to make Ford minivans. Or the workers that used to make toys, lawn mowers and televisions. Nor is the market’s ability to inflict pain news to anyone who has to fill up a gas tank or pay for their own health insurance.

But in all of those cases, we let the market do its work, or at least profess faith in its ability to do so over the long run – if, for example, we could clear out those silly government bans on offshore drilling. But when you’re an investment bank or an international insurance company, I guess drill, baby,  drill – or retrain, baby, retrain – isn’t the answer. The answer is a multi-billion-dollar loan.

I laughed when morning news anchors on CNN lamented AIG’s interest rate of 11.5%, calling it high and an incentive for the company to look elsewhere. Funny, but I don’t recall any journalists wringing their hands over the rates charged to people with credit cards (20%-plus) or the rates charged to subprime borrowers.

Seems to me, if your business is a credit risk and teetering on the edge of collapse, you should pay higher rates. No lender throws good money after bad at a low rate. Well, not anymore, anyway.

Another ridiculous argument in all this is the claim that the collapse of AIG would lead to higher borrowing costs. Higher costs for whom? Certainly not for people buying cars and houses, the two major purchases for most consumers.

The automakers would go lower than 0% if they could and I don’t see that changing – unless they get a bailout of their own. The same incentives apply to housing. If rates rise, home prices likely will fall, making them more affordable in the long run, not exactly the worst news in the world.

Yes, it sucks if you already have a house and the value falls or simply doesn’t go up year after year. But look on the bright side. You own a house. And now you own an insurance company, or at least a 79.5% stake in one. I can’t wait for my first dividend check.

It’s too bad the healthcare system isn’t given to the same booms and busts as our financial system. Then people might actually be talking a bit more about real reform.

Indeed, if I were paranoid, I would say the credit crisis is just a way to divert attention from more serious, long-term issues. After all, banks make money by making loans. They’ll start doing it again someday. And, as I’m sure every mortgage broker never tires of shouting (even today): Interest rates are low by historical standards! Now’s the time to buy!

But alas, people tend to get sick on a fairly regular basis no matter the state of the underlying economy, so business for doctors, hospitals, etc is pretty steady. Kind of like the forward progress the Titanic was making after it bumped into the iceberg. Too big to sink?

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