By John Tamny RealClearMarkets
Amid much fanfare, Treasury Secretary Paulson’s $700 billion plan to allegedly save the banking system passed last Friday. The Dow Jones Industrial Average was up 250 points before its presumed passage, but once reality set in about the inability of governments to fix economies, the Dow fell 150 points on Friday, and it fell another 369 points yesterday.
Much as government action didn’t stave off the Great Depression in the ’30s, so will federal efforts today meant to ward off pain merely cheer scared investors in the near term ahead of a massive hangover. Indeed, there’s a pattern developing here: markets rally upon news of more government "help", but with government intrusion into the marketplace nearly batting 1.000 when it comes to the opposite of success, the wiser among investors inevitably pour cold water on that which won’t work.