Here’s a good round up of the corruption and collusion between Congress and the financial industry:

While Americans were asked to foot the bill—for generations—to bail out Wall Street executives from their sub-prime, mortgage-mad, derivatives driven, un-regulated market—politicians from all parties lined up to feed at the trough—knowing full well that it was these same companies’ bad business practices that placed our financial system at systemic risk.

Sen. Christopher Dodd, who is being paid by taxpayers to oversee these institutions, should return the money on principle or resign from the committee.

Don’t hold your breath.

This is an important point:

The New Deal prolonged the Great Depression because of not one but a combination of misguided policies that made it harder for employers to create jobs and harder for consumers to buy things. Keynesian commentators talk as if FDR made a single key mistake, like not incurring big enough budget deficits. This ignores the tripling of the tax burden during the New Deal period (1933-1940). Also ignored is the fact that New Deal spending was mainly paid for by the middle class and the poor, because the biggest revenue generator for the federal government was the excise tax on beer, cigarettes, chewing gum, and other cheap pleasures disproportionately enjoyed by the middle class and the poor. Moreover, several New Deal laws made everything — especially food — more expensive when Americans desperately needed bargains.

There’s a lot more.

Notions that the New Deal didn’t work because they didn’t do enough of it (particularly based on the absurd notion that the war was “the New Deal on steroids” which was why it did) are just the kind of rewriting of history that I was talking about.

[Update on Tuesday morning]

There are few things I enjoy more than dealing with history-challenged simpletons who stupidly assume that because one doesn’t accept the gospel that FDR Saved Us From The Breadlines, that one must therefore think that Herbert Hoover was (in the parlance of the times) the cats pajamas, and that if we’d only stuck with his (non-existent) laissez-faire policies, all would have been well with the world. Larry Kudlow had a guest on his show who made this idiotic assumption last week, when he talked about Larry’s “hero,” Herbert Hoover. Kudlow quickly put him in his place (as I did here with my own idiot in comments). It’s the same (or at least related) pigheaded mindlessness and false choice that causes people to foolishly assume that because I’m down on Democrats I must be a Republican.

[Update a couple minutes later]

Michael Barone, on the real lessons of the Great Depression. Of course, those pushing “stimuli” don’t want to learn the real lessons, because it would remove much of the justification for their efforts to grow government and take over more and more of our lives as individuals.

[Bumped to Tuesday morning]

Economists say no:

“I think (doing) nothing would have been better,” said Ed Yardeni, an investment analyst who’s usually an optimist, in an interview with McClatchy. He argued that the plan fails to provide the right incentives to spur spending.

“It’s unfocused. That is my problem. It is a lot of money for a lot of nickel-and- dime programs. I would have rather had a lot of money for (promoting purchase of) housing and autos . . . . Most of this plan is really, I think, aimed at stabilizing the situation and helping people get through the recession, rather than getting us out of the recession. They are actually providing less short-term stimulus by cutting back, from what I understand, some of the tax credits.”

It won’t slow them down, of course. Because it’s not really about “stimulus.”

As a commenter over at Instapundit noted a few weeks ago, a government providing stimulus is like an ugly and uncoordinated person performing a lewd dance. Even if the intent is to stimulate, the effect is exactly the opposite.

[Afternoon update]

The shock doctrine:

Last year the US economy was hit with one shock after another: the Bear Stearns bail-out, the Indymac collapse, the implosion of Fannie Mae and Freddie Mac, the AIG nationalisation, the biggest stock market drop ever, the $700bn Wall Street bail-out and more – all accompanied by a steady drumbeat of apocalyptic language from political leaders.

And what happened? Did the Republican administration summon up the spirit of Milton Friedman and cut government spending? Did it deregulate and privatise?

No.

It did what governments actually do in a crisis – it seized new powers over the economy. It dramatically expanded the regulatory powers of the Federal Reserve and injected a trillion dollars of inflationary credit into the banking system. It partially nationalised the biggest banks. It appropriated $700bn with which to intervene in the economy. It made General Motors and Chrysler wards of the federal government. It wrote a bail-out bill giving the secretary of the treasury extraordinary powers that could not be reviewed by courts or other government agencies.

Now the Obama administration is continuing this drive toward centralisation and government domination of the economy. And its key players are explicitly referring to heir own version of the shock doctrine. Rahm Emanuel, the White House chief of staff, said the economic crisis facing the country is “an opportunity for us”. After all, he said: “You never want a serious crisis to go to waste. And this crisis provides the opportunity for us to do things that you could not do before” such as taking control of the financial, energy, information and healthcare industries.

That’s just the sort of thing Naomi Klein would have us believe that free-marketers like Milton Friedman think. “Some people stockpile canned goods and water in preparation for major disasters,” Klein wrote. “Friedmanites stockpile free-market ideas.” But that is exactly what American left-liberals have been doing in anticipation of a Democratic administration coming to power at a time when the public might be frightened into accepting more government than it normally would.

As is often the case when the left accuses the right of something (lying, racism, hate), Naomi Klein’s thesis is simple projection.