The VIX has gone off the charts in recent days: that's the Chicago Board Options Exchange's Volatility Index , which measures the ups and down of the stock market. It also is regarded as a measure of the fear factor working in the capital markets. Nobody in the securities business has seen anything like it.
The adrenaline-driven activity on Wall Street runs on emotions born of having lost faith that our financial crisis eventually will be resolved. Americans have had it so good for so long, anything less than prosperity sets off panic in soul and pocketbook.
Speaking of fear and panic, treasury secretary Henry Paulson is no help. Every time the man opens his mouth, he scares the hell out of half the world. The scratchy-voiced secretary needs a new speechwriter.
It would help if he could refrain from appointing people connected with Goldman Sachs, where Paulson was the CEO, to positions of prominence. Before Paulson, Bill Clinton's secretary of the treasury was Bob Rubin, another ex-Goldman Sachs CEO, who has much to answer for his role in the crash of 2008. Now Paulson is putting his Goldman Sachs protégé, Neel Kashkari, in charge of the $750 billion an anguished Congress gave him, thus adding to the rancid, conflict-of-interest smell  wafting out of the Treasury Department. Instead of feeding the public paranoia, Paulson must make people believe that we are not going to suffer the general collapse that took place in 1933.
One positive difference between then and now is that in the United States and abroad, central bankers and ministers of finance are working in something vaguely approaching cooperation to hold back a financial atomic winter. Eighty years ago, it was every nation for itself--not that working together is coming easy, since each nation has different needs, capacities and constraints.
There is no rule book for how to get the banking system doing what it is supposed to. Paulson et al. must extemporize--which is messy. Nonetheless, in contrast to the early years of the Depression, the US government, the final refuge, is going all-out. God only knows what it will take--but since bankers only make money by lending money, sooner or later a few of them are going to be tempted to get back in the game. Then credit will begin to flow, as liquidity swirls through the rusty pipes of American finance once more.
It is asking too much to expect Washington to prop up the stock market. Regardless of the daily train-wreck on the New York Stock Exchange, at some point adrenal glands will run out of secretions and the stock market will settle of its own accord into a somewhat less hysterical pattern of ups and downs.
That may not be soon, if the market crash of 2008 resembles the gyrations that followed the 1929 crash. The Dow Jones company recounts  that its famous average "plunged 52.7 percent in 1931 and 32.8 percent in 1937, but it rose 66.7 percent in 1933 and 38.5 percent in 1935. Daily volatility was also intense. Strange as it may seem, seven of the ten biggest up days in history, on a percentage basis, occurred during the 1930s."
It's important to remember that even in the depths of the Depression, companies did business and made a profit. The names of some of the companies that were founded or prospered in the 1930s include Hewlett-Packard, RCA, IBM, Tyson Food, Owens-Corning and Texas Instruments.
Short of revolution, life--and therefore, business--continues on some scale, even in the worst of times. If one-third of the nation was out of work in the 1930s, two-thirds of the nation was still employed.
We are better situated today than were Americans of the Depression years. We have unemployment insurance, Social Security, bank-deposit protection and other programs, which will save the jobless and moneyless from having to live in packing crates and cook over open fires, as did the people forced to hang on to life in what were called Hoovervilles .
In fact, there is money to be made in today's market. Warren Buffett can explain how to sort through the ruins of the 2008 crash and pick out winners, but that is beside the point. The real point is that when the markets calm down, when liquidity is returned, and we are sunk in the recession that will follow, America will be a changed place.
We will not be able to pick up where we left off: the joy ride of the last twenty years is over. We will have the choice of becoming a graying world power in decline or a nation dedicated to reinventing itself. Out of economic necessity, we can build a happier, greener and more humane America.