See the previous entry about how a public demand for "perfect" safety can paralyze our life, our economy, and whatever activity we are engaged in (NASA often seems to veer off in this direction, but the air travel "crisis is the clearest teaching example I have seen lately). We need REASONABLE efforts at safety. We do NOT need a public demand that the Federal Government provide ups with "perfect" safety in our lives.
You may not realize it, but the demand that the government DO SOMETHING to keep us from ever having a recession is the SAME DISEASE.
Recessions are the corrective mechanism for "irrational exuberance" in the economy (although sometimees they are triggered by unexpected events), as is true of the present reaction to "irrational exuberance" in home buying and lending.
If you adpot the goal of insisting that the government MAKE recessions NEVER happen, then you are asking for it (watch what you wish for). If the government distorts the long term health of the economy in an overreaction to every downturn, then the NEXT recession becomes WORSE--perhaps even a depression.
The media is turning "recession" into a scare word, like "depression.". It is a totally UNREAASONABLE goal to DEMAND that there NEVER be a recession. Economic cycles just do not act that way. And the government can't make them.
What we NEED are politicians with perspective, and a long term view. Sure, SOME reaction to something like the housing/mortgage crisis is inevitable. And each recession SHOULD cause us to make long term changes that may be needed (as exposed by the events that triggered whatever particular recession we are in). However, the GOAL has to be to create a healthy economy, where recessions are mild and short.
It DEFEATS that goal to overreact to a particular recession. Yet, we weem to be approaching the point where we are going to overeact to EVERY recession, and every other thing that people think the government should be able to do something about.
Is there any indication that politicians are willing to try to wean us off of this increasing reliance on government--especially the Federal Government, which is the WORST of all because of the central planning element--to make our lives PERFECT. Not a chance.
Don't hold your breath for any change, either.