The air has gone out of the real estate bubble and the government is feverishly trying to pump it back up. Easy, cheap money caused the bubble and Congress wants to fix it with even more easy, cheap money. Talk of the Great Depression permeates the air.

The New York Times is comparing the present situation with the first Great Depression and Barack Obama's election with Franklin D. Roosevelt's in 1932. FDR was America's greatest president based on good intentions --- the most disastrous based on facts. In 1932 when elected there were 11,586,000 unemployed. In early 1939, after 8 years of audacious "economic" experiments there were 11,369,000.

FDR's Treasury Secretary, Henry Morgenthau, told his fellow Democrats, "We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises ... I say after eight years of this administration we have just as much unemployment as when we started ... and an enormous debt to boot!"

Only after 11 million men were inducted into the military for World War II did the first Great Depression end. While FDR's critical declaration of a "Bank Holiday" stopped a run on the banks, most of what the government did between 1932 and 1939 made things worse. Dozens of new regulatory agencies turned a minor cyclical recession into a depression lasting 11 years. Facts are stubborn things.

Of course, people who attended government schools with government-paid teachers, and had textbooks with the government's stamp of approval have a somewhat different outlook. Franklin Roosevelt was an economic illiterate with a flair for catchy phrases about "empty lunch pails, Fear and Infamy." Fortunately, Barack Obama is surrounding himself with the best economic minds in America, Paul Volker and Warren Buffet among them.

The first Great Depression was a failure of creeping socialism. Our current problems likewise are a failure of the socialist portion of the U.S. economy and not a failure of capitalism. As Margaret Thatcher would say, "It takes a lot of free enterprise to pay for all the socialism politicians love." Sixty-one of those politicians are in the Progressive Caucus of Congress including Nancy Pelosi, Barney Frank, David Bonior, Charles Rangel, Henry Waxman, Maxine Waters and Bob Filner. Google: Democratic Socialists of America (DSA), dsausa.org/dsa.html

With $2.6 trillion already committed to the "housing and credit bailout," it seems everyone wants a share of the fishes and the loaves -- including the GM, Ford, and Chrysler unions (voters), the airlines, various governors, mayors and credit card companies posting losses of $41 billion this year.

Members of Congress everywhere are encouraging moratoriums on foreclosures, and if foreclosures, why not rents, student loans, auto loans and credit cards? Congress wants money from producers of wealth to go to losers of wealth -- taxing profits and socializing losses. People forget that free enterprise capitalism is both a profit and a loss system, which when unhampered efficiently, allocates money and resources for the greatest productivity.

We are going through a Grand Deleveraging and when credit shrinks, prices fall. Ask yourself, will this Congress be able to replicate the Great Depression? Interestingly, Joseph Kennedy increased his fortune from $4 million to $180 million between the beginning of the Great Depression and 1935, and thereafter by another $300 million.

Bubbles and depressions are not new. In "Extraordinary Popular Delusions & the Madness of Crowds," Charles Mackay writes of Tulipmania. Tulips came from Turkey to Holland in the middle of the 16th century when rich people started paying fabulous prices. Soon everyone wanted in on the skyrocketing market in tulip bulbs. By 1634 "wealthy Dutchmen" were known to invest a fortune of 100,000 florins in 40 bulbs. Tulips were regularly sold on the Amsterdam Stock Exchange and by 1636 on the London Stock Exchange.

The Semper Augustus variety was so desired that "one buyer offered 12 acres of buildable land. Another one was purchased for 4,600 florins plus a new carriage and two grey horses including a set of harness." Eventually people realized that like houses in San Diego, prices simply could not go up forever with no ultimate buyers. The price of tulips began to fall, then plummet and as the "psychology" of ever higher prices broke, they finally dropped to a level from which they never again rose. (Interestingly, Japan today has not recovered from its real estate "bubble" after 17 consecutive years and the Nasdaq "bubble" is still down 66 percent from its 2000 high).

Tulip buyers defaulted on payments, even though their names were published daily in all of Holland. Millions in profits, equities and credit extended -- wiped out! The matter was referred to The Hague; the judges however, unanimously refused to interfere.

So what is the message? For those who speculated in homes, condos and other real estate not as investments to hold -- but only to re-sell quickly to others at a profit -- as Humphrey Bogart would say, "It's curtains."

Joe Kennedy, however, would say, "It's an opportunity of a lifetime."