It's more than numbers, though. It's something much bigger.
I believe that 9/15 not only marks the commencement of the current crisis, it marks the end of the Fiesta – the sixty-year party that has come to define our economy, our culture, our very way-of-life in this nation. It blew itself out with a bacchanalian orgy of greed, duplicity, arrogance, and great jokes by late-night comedians. The Fiesta is over. Let the Hangover begin.
It's just a theory – only time will tell if it's accurate or not. But I know this for certain: many powerful forces will work hard to convince us that the Fiesta continues. Party on, they will tell us. Have another drink. Turn up the music. Keep dancing. How the public responds to this come-on will tell us a great deal of the future course of events, in my opinion. If the American people want to keep dancing and drinking, then a certain sequence of events will unfold. If they want to sober up (and the current spike in savings rates suggests they are considering it), then we'll head down a different path. It's a critical fork in the road – and a difficult decision too, especially because we can't see very far down either path.
The end-of-the-Fiesta is not just my theory. In a column published on December 31st, business journalist Robert Samuelson says this about the current crisis: "It's the end of an era. We know that 2008, much like 1932 or 1980, marks a dividing line
Adding to the uncertainly, writes Samuelson, is a frightening fact: everyone was wrong. The risk posed to the economy by subprime mortgages was supposed to be small. Wrong. Home values wouldn't drop. Wrong. Banks couldn't fail. Wrong. Credit wasn't supposed to dry up. Consumers wouldn't stop consuming. Globalization would cushion any economic downturn… Wrong. Wrong. Wrong.
"What will emerge from these shattered illusions?" Samuleson asks. "Will the crash stir social unrest, abroad if not here? Will Americans become so thrifty that they hamper recovery? Will economic nationalism surge? Much depends on whether the frantic policies to combat the recession succeed. Probably they will, but there are no guarantees. Our ignorance is humbling."
Indeed. No wonder we're feeling unsettled.
Another observer, the ever trenchant Jim Kunstler, worries that the public will be all-too-eager to be duped by their leaders again (his forecast for 2008, by the way, was right on the money: "I can't imagine any scenario in which the U.S. economy doesn't end up on a gurney in history's emergency room," he wrote). Once the current recession is over, he believes, we will eagerly try to recreate 1999, replete with easy mortgages, blue-light-specials, shopping on credit cards, and endless happy motoring.
"The political theater of the moment is…focused on the illusion that we can find new ways of keeping the old ways going," he writes on his weekly blog. "Many observers have noted lately
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