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To prevent the next financial crisis from being worse than the last, Congress needs to take action. You can help.

The last crisis exploded into a full-blown panic in September 2008, becoming the worst economic upheaval since the Great Depression. In Sonoma County, 28,000 people lost their jobs, more than 15,000 homes were lost to foreclosure, and painful scars remain.

It could have been a lot worse.

Between 2007 and 2010, the Federal Reserve, the Federal Deposit Insurance Corp. and the U.S. Treasury poured more than $6 trillion in commitments and guarantees into the worldwide financial markets. By the middle of 2009, the economy had begun a slow recovery and, by the way, the programs made a profit. Officially, the recession lasted 18 months.

That was different from the Great Depression, when the Federal Reserve declined to intervene and the Depression lasted 12 years, by Fed calculations.

“We did it,” Ben Bernanke, a Federal Reserve governor, admitted in 2002. “We’re very sorry. … We won’t do it again.” As Fed chair, he kept that promise five years later.

The two crises were eerily similar.

In 1929, a stock market bubble burst, triggering four years of runs on financial institutions by panicked depositors and investors frantic to get their money out.

In 2006, a housing bubble burst, triggering four years of runs on financial institutions by panicked depositors and investors frantic to get their money out.

But the outcomes were very different.

Now Bernanke’s worried. Here’s why.

A decade ago, an angry public saw the $6 trillion effort to save the financial markets as a bailout of the giants who caused the crisis, while little guys got shafted. And that was true, of course. Politicians responded to that public anger by making it harder for the federal agencies to bail out the bad guys next time.

Uh-oh.

Bernanke and treasury secretaries Timothy Geithner and Henry Paulson Jr., the trio that led the pedal-to-the-metal response to the financial crisis, are on a campaign to get the emergency powers restored.

Writing recently in the New York Times, they said that while it’s understandable that people feel the bailouts were unjust, “we need to make sure that future generations of financial firefighters have the emergency powers they need to prevent the next fire from becoming a conflagration.”

Here’s what they want Congress to fix:

— Several new limits on Fed operations, including that the Fed can no longer make an emergency loan to save one company, as it did for Bear Stearns and later AIG. It must wait until several firms are threatened and get approval from the treasury secretary.

— The FDIC cannot guarantee new bank debt, as it did in 2008, so banks could get emergency funds.

— The U.S. Treasury cannot guarantee money market funds, as it did in 2008, when it guaranteed $3.2 trillion of deposits threatened by fund collapse.

If you agree with Bernanke, Geithner and Paulson, tell your U.S. representative and senators. The time for regulators to discipline greedy bankers and traders is not during a crisis.

Mary Fricker is a retired Press Democrat business reporter who reports on the financial crisis at repowatch.org. She lives in Sebastopol.

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