Friday, December 12, 2008

No Glib Title Today


I haven’t written much about the economic crisis. As near as I can tell, the sharpest economic minds on earth have no earthly idea what is going on, how it happened, who gets the blame, what to do about it, or how it’s going to end. So what can an English major like me possibly add to the conversation?

Then again, the whole purpose of having a blog is to offer uninformed opinions nobody asked for.

Let’s go back for a moment to the Fall of 2001. The country was in a recession. The dot-com crash had started in March 2000, wiping out paper wealth in the trillions. Numerous corporate scandals, most notably Enron, had more Americans than usual thinking public companies were running elaborate shell games. And two planes flew into buildings in the financial center of planet Earth, killing thousands and paralyzing the global economy.

At the time I thought, we’re really in for it now.

But amazingly, we weren’t. The American economy shrugged off the triple body blows of Dot-Com, Enron, and 9/11 like they were love taps. By 2003, the recession had ended, and the American economy began adding jobs by hundreds of thousands per month and seeing its usual 2-3% growth rates. (The bad news for Bush is that nobody seemed to notice this astonishing success story because Iraq was in flames. Now, nobody is noticing the astonishing success story in Iraq because the economy is in flames.)

At the time I thought, wow, this economy can really take a punch. Or three.

So when this latest storm came along, I remained optimistic longer than most, because I had developed this profound belief in the resiliency of the U.S. economy. That’s not to say that I thought we were recession-proof. Only fools and madmen believe economies can completely insulate themselves from periods of recession. I just thought we’d have 2-3 quarters of negative growth and then whoever won the election in November would get credit for a recovery that was going to come anyway.

But now – who knows? The sharpest economic minds on earth still seem baffled, but there is general agreement that it’s going to get worse before it gets better – especially when the next two shoes drop (the credit card crisis and the effects of growing unemployment). I can only console myself that these guys have been so consistently wrong on just about everything else that they’ll be proven wrong again. And hope that, once again, the American economy will defy expectations and reveal its underlying strength.

To sum up, I’m just like the sharpest economic minds on earth. I have no earthly idea what is going on, how it happened, who gets the blame, what to do about it, or how it’s going to end

So for now, I'll console myself with this: the Mets just added two great arms to their bullpen. Bring on the Fightin' Phils!

Note: Instead of wasting your time here, you should read the work of someone who has a rare combination of deep knowledge, clarity of writing, and intellectual honesty. That guy would be Robert Samuelson at Newsweek. He’s my go-to guy on economic issues. Check out his archive here.

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