Is it 1932 yet?

That’s what many Democrats are hoping! In the wake of this week’s market turmoil, you see smiles on the faces of three groups of people: short sellers, vulture buyers, and Democratic strategists. Wall Street has laid an egg, as Variety famously quipped in 1929, and that means that happy days will soon be here again. You can almost feel the quivering anticipation in the recent column of my friend E.J. Dionne:

“Americans don't mind wealthy and even rapacious capitalists, as long as they deliver the goods to everyone else. But when the big boys drag everyone else down, Americans rise up in righteous anger. The New Deal political alignment endured for decades because the financial elites were so profoundly discredited by the Great Depression. The New Deal coalition dissolved only when prosperity began to seem durable . . . “

It’s quite a confession that prosperity is bad news for your coalition. It almost makes it seem as if liberals welcome misery. Then and only then will the people rise up to demand—what?

That’s the kicker, isn’t it? In the 1930s, the voters demanded harshly punitive treatment of the bankers and financiers they blamed for the disaster. Will today’s middle-class, home-owning, 401-K-investing electorate demand the same? Or might they just possibly want something very different: not retribution, but reassurance.

As Treasury Secretary Henry Paulson is demonstrating day by day, in a crisis, you need a crisis manager. Paulson is making fine distinctions: bailing out Bear Stearns and AIG, allowing Lehman to go bankrupt, and doing a little of both for Merrill Lynch. Events will show whether his judgments were right or wrong. But we all understand that in this emergency, it is vital to have somebody on hand with the experience and expertise to do the job—and the skill and tact to do it well.

Crisis does not bring out the best in Barack Obama. His instinct is to equivocate and temporize. We saw that tendency in August, when the Russians invaded Georgia and Obama had to work through a gamut of soft-line stances before arriving at the same position that John McCain had announced immediately.

McCain’s call for tighter standards on Wall Street point to the lesson to be learned from this crisis: The great national experiment in attempting to push the home ownership rate above 65 percent has ended in disaster. Future homebuyers will be held to higher standards of creditworthiness—and will have to put more money down. Barack Obama’s attempt to condemn “Bush-McCain” economic policy evades the need to produce specific solutions of his own.

As we shift from crisis management to the tough work of devising a longer-term response to the mortgage debacle, we’ll be reminded of another big fact about Obama. He is a classic big-city welfare-state politician. He has lots of ideas about how to share wealth created by others—but very few about how to ensure that wealth is created in the first place.

In attributing the mess on Wall Street to “Bush McCain” policies, Obama omits a key point: the specific policy underlying the mess is one he has enthusiastically endorsed throughout his career—the use of public loan guarantees to stimulate private home construction.

As a state legislator, Obama famously championed “public-private partnerships” to renovate slum housing. On a very small scale, he was advocating the same approach that has stuck the taxpayer with liability for uncounted tens or hundreds of billions of dollars in Fannie Mae/Freddie Mac obligations. It didn’t work any better in Chicago than it worked in Washington and New York.

Shrum is probably right that the novelty and charm of the Sarah Palin selection will likely fade. When it does, voters will confront again the same choice they have faced since early summer: Between the old veteran and the young neophyte, between the would-be reformer and the product of the Chicago machine, between the moderate conservative and the candidate whose core beliefs nobody seems to know, including very possibly the candidate himself.

The usual rules suggest that the challenger ought easily to win this election. But when voters meet this actual challenger, the polls suggest they react exactly as the challenger himself does in a crisis: They hesitate.