The great depression is a series of events that led to the global downfall of the stock markets.
To point to a single event and say; see, this is what caused the depression is, in my opinion, not justified (or something, don't know a better word).
There is a series of events is what lead to the great depression, not just a simple stock market crash.
It's the same pattern we are seeing with our current economic crisis, the more you're trying to prevent a decline, the harder the decline will be. Because you have to pay for the original decline plus any measures that you have taken to prevent the decline.
Ah, but who pays the bailout?
If it's not me, then who?
I do think it is me that's paying the bailout. My government has increased it's debt in order to bail them out. So taxes go up to pay for the added debt of my government, either through VAT or inflation, reducing the value of my life savings. Currently my pension is losing value, so is my house and so are my investments.
So the difference is that with the bailout, I get to keep my money, but I lose on money on all else and the bank doesn't feel the need to change anything, because they are not motivated to in any way.
I'd much rather have the choice of where to put my lifesavings. Then me and me alone would be responsible for finding a place for my money, with either a) high risk, high yield or b) low risk, low yield bank.
A perfect example is the ICE Save debacle. People took enormous risk, but hardly lost any money. And who gets to pay for the loss? People who didn't put their money at ICE Save and for the largest part the Icelandic citizens. Did they have a choice, is that just? I don't think so.
Ask yourself the question, why would any bank be to big to fail?
I think it's a myth, banks are not to big to fail. Freddy and Fanny failed, the world didn't end. So why would that apply to other banks?
Sure, we would have a situation if a big bank collapses. But I think trying to prevent banks from collapsing, only makes matters worse. The impact is still there and the root problem only gets bigger (bankers give themselves bigger raises, take larger risks, feel like they are above the law, etc. etc.).
Nearly every computer in the world runs Windows. Is Microsoft now to big to fail? Should we bail them out as well, if the need arises? What about Apple, Google, Boeing, GM (oh wait)? Where does it stop?
It shouldn't even start to begin with.
If you do not feel the consequences of your decisions, you make them poorly.
Providing a bank with $100 billion in guarantees, a bailout, is something entirely different then turning on the printing press.
A bank run is a panic attack. In order to overcome it, you need to give people the impression that the money is there and that it's safe. So you give people their money as fast as you can. So when people come to the banks, they see it's business as usual.
When you don't provide enough cash, word will get around that the banks are running out of cash and the run will get worse.
With our current high speed access to banks, it's an entirely different story. I'm still thinking about what I think is the best course of action there