The reality is that the bail-out is simply to help these companies make ends meet. It’s no different than if you or I suddenly find that we’re not employed. We don’t have any income coming in -- in fact, money’s going out, because we have to pay for our rent and food and what have you -- and we go to somebody and we ask them to help us out for the time being. Well, they can give us money, but until we find a job and have some way to make income, that money’s going to disappear. That’s the same thing that’s going to happen to GM.

Cory Bortnicker: Right. Well, let’s talk about Rick Wagoner for a second. A lot of the current crisis, as I understand it, stems from a general sense of panic that’s going on right now. By stirring up fears that GM is, quote, too big to fail, is Rick Wagoner making the crisis worse, at least psychologically?

Kevin Depew: Well, I think there’s probably some truth to that. It’s -- we’re starting to get into the irony of the situation is that -- and this is something we’re going to talk about as the fifth thing today, but you start talking about Alan Greenspan now and you start talking about deregulation. And you start getting into areas where, you know, the question comes up "is deregulation a good thing?" Maybe it’s not when you start to have companies reach such proportions that their argument is that they’re too big to fail. Well, how did they get too big to fail? They got too big to fail because of a lack of regulation. They didn’t magically grow to a size that suddenly made the company so .

Cory Bortnicker: If GM and Chrysler were to merge, wouldn’t that, essentially, make them an even bigger company?

Kevin Depew: That’s right. Then they would be definitely too big to fail.

Cory Bortnicker: Right.

Kevin Depew: So that would almost guarantee the additional bail-out that will come down the road four or five years from now when they discover that aggregate demand has not increased for cars, and that they have stiffer competition from the Japanese and even India and China that are beginning to produce cars now. So their competition is only getting tougher.

The aggregate demand has fallen on a secular basis, not just on a cyclical basis.

Cory Bortnicker: Right. Okay. Last question -- before we move on to a different topic -- about GM. When will we expect to hear whether or not they will receive a bail-out?

Kevin Depew: I think probably this week. If not by the end of this week, then certainly by the first part of next week. The time is really ticking. They’re -- both of these companies are losing billions of dollars, and something has to happen very quickly or -- by the end of next week or they’re going to be in serious trouble.

Cory Bortnicker: Okay. Let’s move on. A lot of people have been comparing the current U.S. economic crisis to Japan’s. Can you talk a little bit about why, or why not, this is an accurate comparison?

Kevin Depew: Well, first of all, I get that question a lot about whether the U.S. economy is going into a Japan-type deflationary environment. And the reason that’s closest in familiarity to us is because Japan is the most recent economy that’s had a long-term experience with deflation, with falling prices, where the inflation rate literally goes below zero percent.

The last time that the United States had to deal with this was in 1954, for one year, and then 1948. Because even though people talked about the deflation scare in the United States in 2002, 2003, in the wake of the dot-com bubble, the inflation rate then fell to about 1.1 percent, so it wasn’t actually negative.

Right now inflation’s at 5 percent, so -- but that’s a lagging indicator. And so I think that by this time next year, we’ll be at around 1 percent, maybe even lower.

So the question is, is the United States going to experience the long-term "lost decade" that they called it in Japan?

Cory Bortnicker: Mm-hmm.

Kevin Depew: They’re still dealing, on some level, with deflation now, which has been running from about 1989 through present. So there is some reason for concern.

On the optimistic side, there’s the fact that even in Japan they did not experience a Great Depression. They experienced a severe and long-lasting recession, and saw employment rise, but they also had -- and this is why I am concerned that the United States could face a more serious decline and a more serious recession than Japan; the Japanese consumer in 1989 began with a savings rate, a personal savings rate of about 13 percent. And today, 15 years later, that’s down to 2 percent. So that has actually helped cushion the economy, because consumers, they didn’t stop purchasing things; in fact, they started digging into savings through a variety of means that the government and Central Bank tried to use to encourage people to spend money. They began digging into that savings and reducing it.