Ungreatful

The sublime Mark Steyn makes a brief, but very important, point about the Great Depression. Only in America is it called the "Great" Depression. In Europe, it's just called the Depression. Why the difference? Europe was spared the attentions of FDR and his cabal of economically-illiterate lawyers (a concoction leavened by a sprinkling of Comintern agents). The massive federal power-grab contemplated by the New Deal, and the Keystone Cop regulators behind it, did much to make the Depression a "Great" Depression here in the United States.
The US Bureau of Economic Analysis provides handy historical data to anyone who doubts this. After a disastrous few years (1929-32), exacerbated by such Obama-esque policies as the elimination of tax cuts (the Revenue Act of 1932) and trade protectionism (the Smoot-Hawley Tariff Act of 1930), the US economy started to recover, with growth resuming by 1934. Private investment, in particular, soared in 1934-35 (growing by 80% and 85%, respectively). However, 1935 was also the year that the New Deal's legislative program kicked into high-gear, and the effect was dramatic. Private investment was sharply curtailed, and actually started to decline by 1938 (it fell 33.9% that year). The US economy followed suit, slipping back into a depression by 1938. After a few anemic years, real growth did not resume until 1941. By then, that growth was not coming from private investment, but from the massive increase in federal spending as the US prepared for possible entry into World War Two.
However, it's not just the historical record that suggests the failure of the federally-managed economy. There's also that most bitter foe of contemporary liberalism, known as "common sense." Two points are worth making in this regard:

1. Free markets represent the collective intelligence of millions of economic decision-makers. The notion that some smart-ass lawyer, even graduates of Mammon University (a.k.a. Harvard) or the Leviathan Technical Training College (a.k.a. Yale), could out-smart that collective intelligence is beyond absurd. Only the most egotistical fool would imagine it so.
2. The economy is a non-linear phenomenon. As such, it lacks the principle of additivity (i.e. the notion that the combined effect of multiple causes equals the sum of those causes). In a linear system, where additivity is present, 1+1=2, 2+2=4, and so on. This is not true in a non-linear system, where 1+1 may or may not equal 2. Therefore, there is no guarantee that piling on more regulations will achieve any beneficial effect. Indeed, the historical record suggests the opposite.

This is not to suggest that all regulation is bad, but that the real issue is not more or less market regulation, but good versus bad regulation. Good regulation acts like an attractor, embracing the non-linear market dynamic and attempting to encourage beneficial behavior. Bad regulation, like the indescribably awful Sarbanes-Oxley Act, merely attempts to overwhelm the non-linear market dynamic with linear strictures, usually with disastrous outcomes. FDR's creation of the Great Depression should remind us all of this fact.
McCain needs to make this point on the regulatory issue in his debate with Obama. Urkel will promise to solve all of the market's problems with the hammer-and-sickle combination of regulation and taxation. McCain needs to point out the fallacy of both. On taxes, he can corner Obama by getting him to admit that tax hikes would not be good for the ailing US economy. And, if McCain makes a clever argument on "good" versus "bad" regulation, he can out-flank and flummox Urkel, who knows little beyond what he already believes to be true.