The Great Depression of 2008-09?

With Ben Bernake saying that recession is "very likely over", it is time to take stock of the politically-inspired fear mongering that has surrounded this recession.

The Federal Reserve pursued policies in 2008-2009 completely contradictory to those pursued during 1929-1933. In 1929-1933, the Federal Reserve reduced the supply of money, creating a huge deflation and destroying the financial system. In contrast during in the past 18 months, the Fed has flooded the economy with money, with a predictable result: the recession would end led by monetary policy.

But the Democrats saw political gold in creating the impression that the economy was in terrible shape, and with a compliant press, succeeded. It was a critical element to Obama's victory last November and to passing the "stimulus" bill, whose effects have barely registered and for which most of its spending has yet to take place.

Monetary policy, along with government led subsidies for housing, got us into the financial crisis and recession. Now it is getting us out of the recession. Obama deserves no credit for this since he wasn't the architect of monetary policy - that is the Fed's job, which is an entity independent of the executive branch.

Instead, Obama's spending extravaganza, raising taxes, nationalizing the auto industry, proposing radical changes to the healthcare industry, opposing free trade pacts, and promoting cap-and-trade all serve to increase uncertainty in the economy and slow recovery and growth going forward.