The Relevance of the Great Depression
According to a version of history that is widely accepted, the Great Depression occurred because of inherent flaws in laissez-faire capitalism and was successfully dealt with by the New Deal. According to a more recent and I think more nearly correct interpretation of the evidence, the Great Depression occurred because the Federal Reserve, the institution created by the government to prevent a banking panic, responded to the initial bank runs by tightening rather than loosening, making the problem worse rather than better.
More relevant to the present situation, the account I think more nearly accurate holds that the continuation of the Depression was more nearly because of the New Deal than in spite of it. A decade earlier, what looked as though it should have been the beginning of a great depression was met with no substantial government intervention and the effects were over in a year or so. This time Roosevelt intervened on a massive scale, following a similar but smaller intervention by his predecessor, and the depression was still going eight years later when the attack on Pearl Harbor pulled the U.S. into the war.
It could happen again. One can imagine a future in which President Obama, supported by Democratic majorities in both houses, engages in massive interventions in the economy following the massive interventions already under way and the result is a serious economic downturn prolonged for years, perhaps for two terms. If that happens many people--most obviously, the same people who insist that the collapse of Fannie Mae and the associated difficulties are the fault of laissez-faire and deregulation--will conclude that only massive intervention preserved us from a still worse outcome.