One of my favorite shows to watch after a long day at work is Countdown with Keith Olberman. It is entertaining with its derision of Bill O'Reily on its Worst Persons and its lambasting of the Bush Presidency in its Bushed segment. However, there is one statement made by Keith Olberman with which I must take exception. In one segment he compared the administration's inaction in the face of the current mortgage crisis to what he called "Hoover's let them eat cake" mentality. This statement reveals an ignorance of the actual historical record.

It is a commonly held belief that the Great Depression was brought about by Herbert Hoover's inaction and that the Depression was an example of the failure of laissez faire capitalism. This belief is false. The Great Depression was initially the result of malinvestments caused by the Federal Reserve's rapid inflation of the money supply during the 1920's. Also, under the Hoover administration the federal government created many programs that would lay the foundation for Franklin D. Roosevelt's New Deal, which helped to prolong the Depression. In fact, during his election campaign, Roosevelt portrayed Hoover as a wasteful spender. The belief that Hoover did nothing is false.

The malinvestments that have occurred in the housing market must be liquidated in order to provide a foundation for future prosperity. The knee-jerk reaction for our government "saviors" to do something is short-sighted and reflects a lack of knowledge of past economic crises and their causes.