The current mortgage and stock market crises take Americans on a walk down the nation’s economic memory lane. The reminders of the past—Black Thursday, the Great Depression and the dot-com crash—are not encouraging, and have many people wondering whether history is being repeated. While this bleak prediction is a real possibility, the present policy-makers have a golden opportunity to learn from the past. The government has been behind nearly every successful economic recovery. Now, as before, it has a duty to step in to relieve the economy. The history and structure of the American economy indicate that government intervention, when enacted in a timely and responsible manner, is the best course of action in economic crises.

One does not need to dig through history for hints: the current crisis has many factors supporting government involvement in the economy. People see the downfall of banks and the desperation of homeowners and wonder what went wrong. What they do not see is that behind the mortgage meltdown is a series of government mistakes. Laws outlawing mortgage brokers (businesses that allow people to get mortgages without going through banks) disintegrated until the housing market became flooded with irresponsible lenders and homeowners. Supporters of minimal federal intervention falsely assume that this failure of financial law means the government should stay out of the economy. However, they must realize that as this is a legal matter, the government has a responsibility to step in. An “it’s the Feds’ fault, make them fix it” approach, while not always helpful, is essential here because of the nature of the issue. If the government steps in now to solve the problems at the heart of the crisis, it may prevent future economic disasters of similar natures. Hopefully this crisis will be a wakeup call for Washington lawmakers to reexamine economic law, especially those policies regarding loans.

The American economy is a delicately balanced system based on laissez-faire, the free market system. Theoretically, the economy is driven entirely by private enterprises that are entirely responsible for their own successes and failures. This system works well, but only when there are government restrictions such as tariffs on foreign goods, minimum wage, bans on monopolies and per-unit taxes or subsidies on goods produced in the United States. These restrictions protect everything from the rights of workers to the needs of consumers and producers. Without them, the economy would be in turmoil, floundering under the weight of unscrupulous business practices and uncontrolled price hikes and crashes. By no means does this mean that everything needs a regulation; many aspects of the unbounded free market are beneficial and allow for economic freedom and growth. To rectify the current problem and prevent another similar crisis, the government only really needs to reimpose banking and lending restrictions, such as the barrier that prevents banks from investing in the stock market, that keep the banking industry stable. It is in the government’s best interest to correct any imbalances in the economy. It is the federal wallet that feels the pinch when the forces that fund it are no longer under control.

Looking again at today’s economic troubles, it seems that Congress needs a reminder of what inaction leads to. The Great Depression went from bad to worse under the false optimism of President Hoover. With him, America learned the meaning of “too little too late.” The economy is designed to be partly self-sufficient, but when asked to decide between cutting losses now and hoping for the best, there is only one course of action that makes sense. Luckily, Congress chose a bad situation over a worse one and passed the bailout bill. They still have a ways to go if the economy is to be salvaged, and there are still politicians who balk at a $700 billion check. However, if the government has not recognized its duty to the protection of economy yet, it had better start doing so now.