Watching Wall Street and the American real-estate market crumble over the past 10 months has not inspired great confidence in our wonderful free-market economy or the land pirates who run it. As someone who recently wrestled with the causes and consequences of the Great Depression, I find the current economic shipwreck not merely spooky but downright terrifying.

    Working as a historian is a discouraging business. No one seems to learn anything from history - that's pretty much a given - but we keep hoping. As a chronicler of the 19th century American West, I had my work cut out when a family friend asked me to write a biography of her father, Judge Wilson McCarthy.

    Herbert Hoover appointed McCarthy to represent Western Democrats on the board of the Reconstruction Finance Corporation, Hoover's only real response to the worst economic disaster in American history. The RFC attempted to restore liquidity to the economy by getting cash out from underneath mattresses and into circulation.

    Last year I had to look up "liquidity" to remind myself what it meant. Today I could sort through 23.2 million Google hits to learn more.

    "History doesn't repeat itself," Mark Twain said, "but it does rhyme."

    The similarities between economic conditions in 1929 and 2008 rhyme like hickory, dickory, dock. As early as 1935, "brain truster" Rexford Tugwell identified the root cause of the Great Depression as the failure "to pass on a fair share of the spectacular productivity gains of the 1920s" to both labor and consumers.

    An enduring agricultural depression, the grossly inequitable distribution of wealth, massive consumer debt, tax cuts for the rich and what historian Robert S. McElvaine called "the wild speculation of the decade's orgy of greed," all made matters worse. This multifaceted bankruptcy led to the Great Depression, but massive corporate corruption and the incompetence of the ruling class are unappreciated, if familiar, factors in creating the catastrophe.

    Free marketeers struggle to explain away the collapse of the virtually unregulated economy of the Roaring Twenties. In 1963 economist Milton Friedman elucidated the failure of laissez faire as "a tragic testimonial to the importance of monetary forces." Adam Smith's disciples laid the blame on the regulators, specifically the Federal Reserve Board's attempt to rein in speculation on Wall Street.

    At Friedman's 90th birthday celebration in 2002, then-Fed board member Ben Bernanke said, "You're right, we did it. We're very sorry." I wonder what Chairman Bernanke is sorry for now?

    The only trouble with capitalism is the capitalists, Herbert Hoover told a journalist. "They're too damn greedy." The Depression proved him right. "We must all do our bit," said J. P. Morgan, but the great financier did not pay a nickel in federal income tax in 1930, and neither he nor his partners paid any in 1931 or 1932.

    Treasury Secretary Ogden Mills granted his father's estate $6 million in relief on what is now damned as the "death tax." The Chicago Tribune called on citizens to pay their full taxes, while its publisher, tycoon Robert R. McCormick, handed over only $1,515. Investment banker S.J.T. Strauss paid a whopping $18 in taxes. At the same time, wealthy Americans sent $100 million in gold to Europe every week in the first months of 1932.

    As a survivor of what he called "the Great Slump," the great European historian Eric Hobsbawm found it almost impossible to grasp how free-market orthodoxy, so obviously discredited in 1933, "once again came to preside over a global period of depression in the late 1980s and 1990s."

    Hobsbawm believed this strange phenomenon evoked "the incredible shortness of memory of both the theorists and practitioners of economics." It also showed why society needed historians to act as "professional remembrancers of what their fellow citizens wish to forget."

    There are differences between today and 1929; for example, the dollar was in great shape and the deficit was virtually nonexistent. So why worry? Most historians believe history doesn't repeat itself. It just seems to.

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    * WILL BAGLEY is an author, publisher and historian. Utah State University Press released his "Always a Cowboy: Judge Wilson McCarthy and the Rescue of the Denver & Rio Grande Western Railroad."

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