SiliconBeat

Here’s one thing we can all agree on: we are in the midst of interesting times.

While there is no shortage of the heat of opinions and outrage surrounding the current financial mess. What’s in less supply is the light of facts, analysis and context.

A press release today from Duke University called our attention to a white paper written by one of its finance professors, Chris Harvey (pictured), titled “The Financial Crisis of 2008: What needs to happen after TARP.” TARP refers to that part of the bill that was voted down by the House of Representatives Monday known as the Troubled Asset Relief Program, acronym TARP. Not exactly the ideal covering in case of a financial tsunami.

Harvey contends that the measure is “insufficient” to end the current crisis and he proposes a “fundamentally different approach” to dealing with troubled assets, recapitalizing the Federal Deposit Insurance Corporation and working to reduce bank runs. Whether or not one agrees with his prescriptions, a few of his facts are quite sobering.

Consider this: During the financial crisis period from 1929 to 1933, there were over 9,000 bank failures. The combined deposit base of the failed institutions was $7.1 billion or $90.4 billion in 2008 dollars. Now look at Washington Mutual, the failed bank that was seized by the U.S. government and had its assets bought by JP Morgan. It had a deposit base of $188.3 billion as of June 30, 2008. For one bank.

And comparisons with the Savings & Loan crisis of the late 1980s are also unsettling. The Resolution Trust Corporation set up in 1989 to deal with the assets of failed S&Ls. was initially assigned approximately $125 billion in assets of almost 300 failed institutions. They added about $400 billion over a six year period from other institutions that were insolvent, making the total assets targeted for disposal $550 billion, or roughly $900 billion in 2008 dollars.

Compare that with the combined assets of just two firms that have failed so far in the current crisis — Lehman Brothers and Washington Mutual — involve assets worth $946 billion, exceeding the total assets targeted during the S&L crisis.