As the worst financial crisis since the Great Depression continues to worsen, decades of deregulation and the growing independence at the state level are being reversed as a deteriorating national economy forces the federal government to increasingly take on responsibilities that no other institution has the power or resources to handle.

This dismantling of the so-called “New Federalism” will be readily apparent again this week as the federal government is once again at the forefront of the most-closely watched  crisis-fighting initiatives at hand: With Congress pushing forward on an $827 billion stimulus plan and the Treasury Department planning to unveil its new banking bailout blueprint on Tuesday, economists and other experts say the federal government is taking its biggest role in the economy in a generation.

States that once pushed away from the federal government as part of the New Federalism are now essentially begging

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Last week’s crude and gasoline inventories dropped more than expected as the effects of Hurricane Gustav resulted in some production disruptions. Gustav, which struck last month, was the fourth-most-destructive storm to hit the United States, causing $20 billion in damages. And then came Hurricane Ike. Ike made landfall in the Galveston area of the U.S. Gulf Coast on in the pre-dawn hours Saturday (the day I was penning this column) as a Category 2 storm with winds hitting 110 miles per hour.  Ike’s path toward Houston makes it the first storm to hit a major U.S. metropolitan area since Hurricane Katrina eviscerated New Orleans in 2005, Bloomberg News reported. We won’t know how much direct damage those high winds from Hurricane Ike will cause for several days at least. From the initial reports, the results appear to be devastating. But the indirect costs are ...