Lee E. Ohanian

"The government is doing what it can. They've learned the lessons of the 30s. And the lesson of the 30s was to put ideology aside and do whatever you can to bail it out," New York Times Chief Financial Correspondent Floyd Norris said in an Oct. 8 video on the publication's Web site entitled "Echoes from a Dismal Past."

"I agree with you," economics reporter Louis Uchitelle said, also pointing out that it took two years before the government really "stepped in and acted" during the Depression - referring to Franklin Roosevelt's action.

Norris said one of the first lessons of the 1930s was that bailing banks out would "limit the damage of the financial crisis."

"If you go back just two or three years ago, you had this powerful argument that government was the problem. So there is emerging from this an understanding that markets and government are married whether they like it or not," Uchitelle said.

According to one UCLA economist, the U.S. is economically sound, but people have panicked because of "scary" warnings surrounding the $700 billion bailout.

"Periods of crisis often beget bad policies," Lee E. Ohanian, an economist at the University of California, Los Angeles (UCLA) said in an interview with Reason.tv. The professor stressed that six weeks ago the fundamentals of the economy looked "pretty good," before bailout "rumors" caused "panic":

What I mean by fundamentals are the amount of factories and office buildings and capital equipment we have in place, there's no change in that. There is no change really in individuals' interest in working. We've got the same work force right now we had six weeks ago. Productivity is about the same as it was perhaps even higher. All those fundamentals of the economy are the same.

Ohanian said Gross Domestic Product growth over the last five to six quarters was "on average," and productivity growth was "very high"

Video after the jump.