The new economy is the Internet Economy. The Internet Economy is reshaping the fortunes of business, countries and people, leveling the playing field for everyone, and driving the most significant economic shift since the Industrial Revolution.”

– Cisco CEO John Chambers, Sept. 24, 1998

When he appeared at our D5 conference in May 2007, Sen. John McCain said that, given the chance, he’d hire Cisco CEO John Chambers for his cabinet. Now, in the run-up to the November presidential election, it looks like Chambers has some competition for that spot. In an interview with Reuters today, McCain said that Chambers–who’s contributed quite a bit to the McCain campaign–is still on his short list of potential Treasury secretaries, but the Cisco (CSCO) CEO has some company. “I think it would be someone that Americans would recognize that would inspire trust and confidence,” McCain said. “There’s people like John Chambers, there’s people like [former eBay (EBAY) CEO] Meg Whitman, there’s people like Warren Buffett.”

Apparently, current Secretary Henry Paulson doesn’t quite cut it anymore. Anyway … it’s curious that McCain would include Buffett among his choices for Treasury secretary since his appointment would almost certainly outrage tax-cutting fiscal conservatives to near-aneurysm. Indeed, it already has. Said Grover Norquist, president of Americans for Tax Reform, “Warren Buffett is a goddamned Democrat and he doesn’t understand that a 28 percent capital gains tax would be a bad thing. He might be a good bridge partner, but he’s awful on policy.”

Incidentally, Barack Obama’s list of potential Treasury secretaries includes no Silicon Valley CEOs, current or otherwise. According to people close to his campaign, it includes New York Federal Reserve Bank President Tim Geithner, former Treasury Secretary Larry Summers and former deputy Treasury secretary Roger Altman.

With Adam Smith’s oft-lauded “invisible hand” giving investors the invisible finger and the U.S. mired in one of the worst market crises in recent history, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke finally decided to act. This morning they announced a sweeping plan to revive the suffering U.S. financial system. Using “hundreds of billions of dollars” in government funds, the Treasury will clear bad home loans from the books of the country’s financial institutions.

“The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy,” Paulson explained in remarks to the press. “The financial security of all Americans–their retirement savings, their home values, their ability to borrow for college, and the opportunities for more and higher-paying jobs–depends on our ability to restore our financial institutions to a sound footing.”

Suffice it to say, Paulson’s remarks went over quite well with investors, who’ve clearly had quite enough of the market’s spelunking expedition. The Dow leapt more than 2 percent in the first moments of trading today, the Nasdaq more than 5 percent and soon the markets were well on their way to their biggest 2-day rally since 1929.

“Just like a child wishing for a Wii or an Xbox on Christmas Day, the market was hoping for some sort of RTC-type of arrangement, and there it was underneath the Christmas tree,” said Deutsche Bank’s Owen Fitzpatrick. “It was the booster shot that the market was looking for.” (”RTC” refers to the Resolution Trust Corporation, the entity created by the federal government to address the savings and loan crisis of the late eighties and early nineties.)

Question: Is this enough to heal the nation’s shaky financial system or will the market crisis reappear again like the dead uncle in some “Weekend at Bernie’s” (or, rather, “Bernanke’s”)-style Wall Street sitcom (”Bernie may be dead, but he’s still the life of the party!”)?

[Chart Credit: The Big Picture]