"But then, why the hell did the Great Depression happen?"

"Confidence," Fiedler replied. "A huge number of people really got slammed in '29 because of margin calls. They bought stock while putting up an amount less than the value of the transaction. Today we call that sort of thing leveraging. Then they were unable to cover their exposure when they had to sell off. The banks and other institutions took a huge beating because they had to cover the margins. You ended up with a lot of little people who were left with nothing but debts they couldn't begin to pay back, and banks who were cash-short. Under those circumstances people stop doing things. They're afraid to risk what they have left. The people who got out in time and still have money—the ones who have not actually been hurt—they see what the rest of the economy is like and do nothing also, they just sit tight because it simply looks scary out there. That's the problem, Arnie.

"You see, what makes an economy isn't wealth, but the use of wealth, all the transactions that occur every day, from the kid who cuts your grass for a buck to a major corporate acquisition. If that stops, everything stops." Ryan nodded approval to Fiedler. It was a superb little lecture.

"I'm still not sure I get it," the chief of staff said. The President was still listening.

My turn. Ryan shook his head. "Not many people get it. Like Buzz said, it's too simple. You look for activity, not inactivity, as an indication of a trend, but inactivity is the real danger here. If I decide to sit still and do nothing, then my money doesn't circulate. I don't buy things, and the people who make the things I would have bought are out of work. That's a frightening thing to them, and to their neighbors. The neighbors get so scared that they hold on to their money—why spend it when they might need it to eat when they lose their jobs, right? And on, and on, and on. We have a real problem here, guys," Jack concluded. "Monday morning the bankers are going to find out that they don't know what they have, either. The banking crisis didn't really start until 1932, well after the stock market came unglued. Not this time."

"How bad?" The President asked this question.

"I don't know," Fiedler replied. "It's never happened before."

" 'I don't know' doesn't cut it, Buzz," Durling said.

"Would you prefer a lie?" the Secretary of the Treasury asked. "We need the chairman of the Fed in here. We're facing a lot of problems. The first big one is a liquidity crisis of unprecedented proportions."

"Not to mention a shooting war," Ryan pointed out for those who might have forgotten.

"Which is the more serious?" President Durling asked.