Myth busting

at the WSJ:

One such myth is that the Treasury's bank asset-purchase plan that passed Congress last week is somehow a financial silver bullet. It is merely a single tool, and in any case it can't do much about the panic now afflicting banks across Europe. It also can't rescue the property markets in Dubai, or the flight from emerging market stocks that also marked yesterday's news.

Another myth is that exports to the rest of the world would somehow rescue the U.S. economy. This was the idea behind the devaluationists -- in Washington and at Harvard -- who pushed a weak dollar to promote exports to counter the U.S. housing slump.

A third mistaken idea is that Federal Reserve rate-cutting would save the day. This is the poor sister of the weak-dollar lobby, popular on Wall Street and at Chairman Ben Bernanke's Fed. Despite a year of falling rates, the financial panic is worse than ever and now the real economy is getting hit. The Fed's rate cutting led to dollar flight that produced a commodity spike and oil as high as $147 a barrel. That only made a recession more likely as it sapped consumer discretionary income around the U.S. and worried families and business alike.

The fourth illusion to burst is that temporary Keynesian "fiscal stimulus" would make all the difference. The Bush Administration and Congressional Democrats teamed up for that mistake in January, promising that $165 billion in tax rebates and spending would spare us from recession. Just a month ago, President Bush was still promoting these rebate checks as a blessing.

And a call for leadership:

It ill serves voters if the two men running for the Presidency of the United States offer little more than campaign boilerplate amid a crisis of this magnitude. The whole world is focused on these sobering events. The time is now for the country's next President to match the moment.