DAILY EXCEPTION

For all my concern about the ballooning deficit and the long term decline in the dollar, I have perhaps overlooked writing about one of the most important economic developments of the past year. It does not concern an event that happened, but rather an event that didn’t happen. Last November, we were gripped with fear at the prospect of total collapse of the financial system. This did not come to pass. The markets didn’t collapse. Credit didn’t freeze in the way it could of. And a depression didn’t ensue. The President’s economic team, particularly Ben Bernanke, deserve credit for this. Decisive action was needed and the Administration provided it. I still maintain that a lack of a plan to restore long term fiscal balance will burden this country in ways not imaginable at present. But the choice to stimulate the economy in the immediate term (even if I question the need for both monetary easing and a fiscal stimulus) was the right one. It was infinitely better than ideas advocated by some in the Republican Party that would have triggered a Hoover-style collapse. Unfortunately for the President and his team, history tends to overlook events that didn’t happen.

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