Last week the president outlined his 2010 message for an audience of Democratic campaign donors:

After they drove the car into the ditch, made it as difficult as possible for us to pull it back, now they want the keys back. No. You can't drive. We don't want to have to go back into the ditch. We just got the car out.

Now, it's understandable for the incumbent party to say that things are looking up. And in certain regards, America's economic position seems to be recovering. The economy is growing again, the markets are better than they were a year ago, and private-sector employment is starting to grow in fits and starts.

But this may be an incredibly myopic and short-term view. The closer you look at what is happening to the Eurozone, the more you realize Megan McArdle was on to something when she wrote:

The Great Depression was composed of two separate panics. As you can see from contemporary accounts--and I highly recommend that anyone who is interested in the Great Depression read the archives of that blog along with Benjamin Roth's diary of the Great Depression--in 1930 people thought they'd seen the worst of things.

Unfortunately, the economic conditions created by the first panic were now eating away at the foundations of financial institutions and governments, notably the failure of Creditanstalt in Austria. The Austrian government, mired in its own problems, couldn't forestall bankruptcy; though the bank was ultimately bought by a Norwegian bank, the contagion had already spread. To Germany. Which was one of the reasons that the Nazis came to power. It's also, ultimately, one of the reasons that we had our second banking crisis, which pushed America to the bottom of the Great Depression, and brought FDR to power here.

Not that I think we're going to get another Third Reich out of this, or even another Great Depression. But it means we should be wary of the infamous "double dip" that a lot of economists have been expecting. The United States is in comparatively good shape, but the euro is in crisis, and already-weak European banks seem to be massively exposed to Greece's huge debt load. They're even more exposed to the debt of the other PIIGS, which is far too large for it all to be bailed out. The size of the rescue package that Greece needs is already going to take a fairly substantial chunk of the IMF's war chest.

Then you read headlines like: "Stocks, Euro Fall, Oil Dips Below $70 on Europe Debt Concern." And "Europe's Debt Crisis is Casting a Shadow Over China." And "Libor Rises on Debt Concerns."

The establishment's policies have been band-aids over a gaping wound. The TARP forestalled bank runs but did not address the underlying issue of out-of-control leverage. The housing plan wants to prevent foreclosures, but does nothing to discourage homeowners from taking on too much debt. The stimulus increased public debt while doing little to stem the tide of job losses. The Euro bailout benefits French and German banks, but the market seems to understand that it won't solve the Greek public sector's liabilities.

It will take a long, long time for all the debt in the system to be worked out. And the process will be painful. And governments don't seem to know how to make it less so.

Obama is selling his fundraisers false comfort. The global economy is not out of the ditch yet. Not at all.

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