Depression Scenario: "still on the table"

Per Simon Johnson here: Does The US Still Face An Emerging Market-Type Crisis?

I fully agree with him that the feds, and DC in general, are yet again (as in Spring 2008 and Fall 2007) unprepared for another leg down in this crisis. We're being lulled into some sort of nervous complacency, and the media in general is more than happy to play along...

Some excerpts from Mr Johnson:

...I don’t think Treasury understands the potential speed with which the crisis can again become more severe - moving back into another phase of chaotic jumps in financial distress around the world.
The most compelling evidence for lack of readiness comes from those who are now most articulate in Treasury’s defense. “Congress will not provide any more money” and “you must recognize the political constraints” are sensible points. But think about what they also imply. Treasury is not making the case, full-time and flat-out, for more funding - on a contingency basis - from Congress. At least from my conversations on Capitol Hill, I see no signs that this is Treasury’s top priority. In fact, I would go further and be blunter: no one is ready.

Arguing forcefully for another round of TARP funding ASAP from Congress, Johnson writes:

.....Don’t let bankers’ past misdeeds (or current power) and market panics ruin the economy and so many people’s lives. Go get the money from Congress - Capitol Hill is full of responsible and responsive people, but the Administration has to make the case, at the highest levels and in the most persuasive manner that saving the financial system from collapse is our top priority.

Don’t make the mistake of Hank Paulson who, until September 17th, always assumed he had more time to prepare (or just prevaricate). When the crisis is upon you, there is no time