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Tuesday, December 02, 2008


still stage one?

this morning, as most weekdays, my wife came out of the bathroom as i got ready to go downstairs to make bottles for the baby. we get a few minutes at the start of every day to lay in bed, either to talk or be quiet, together. usually, bloomberg is on the television. today we chatted just a bit about the depression, and i commented that i was still having a lot of difficulty perceiving the extraordinary reality of what i was seeing. it just doesn't seem possible that things are as bad as they look.

apparently, a lot of people are having the same problem. tim duy today has the misfortune of reading peggy noonan's wall street journal op-ed, and as riposte to noonan's state of denial doles out one of the great laugh lines i've yet read in this disaster.

It won’t be a real recession until we are all covered in nothing but rags.

but duy proceeds to cite very real empirical data on the collapse of the american middle-class consumer as seen through a number of metrics, not least unemployment.

what frightens me, however, is the stubbornness of denial. we would still have four more stages of this crisis to negotiate before it is behind us.

UPDATE: even paul krugman on cnbc -- for all the dire implications of "freefall", "worse than japan" and citing the run on the shadow banking system which is still ongoing -- one doesn't hear the word "depression" except as accompanied by nervous laughter. and krugman, it seems to me, is far advanced in his recognition and realization as compared to most. he is the first public figure i've heard to admit that U-3unemployment is likely to rise above 10%.

UPDATE: further kudos to robert reich for being one of the first public figures i've heard properly term what we are experiencing as a crash, as in "the great crash of 2008".

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some people just can't handle the truth gm.

i'm not sure what evidence noonan needs. maybe she wants a big black cloud to hang over the entire country.

some time ago either here or elsewhere a blogger listed the news of the day when the stock market crashed in 1929. very few realized the enormity of the situation in the early years. i thought that was the case here until just recently. it seems more people have realized the situation. if it's true that ignorance is bliss maybe that's a not a good thing.

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galbraith's history of the 1929 crash gave an excellent treatment of "incantation" -- that is, the latent quasi-conspiracy of officialdom and media to not say anything that might "disturb" the market, even when the market is already engaged in a massacre of the innocents.

the wall street journal is and has always been an excellent repository of cant, exceeded in degree perhaps only by fox news, which is why no one who wants to be well informed should read it -- most especially in a crisis. the journal exemplifies the dictum: "the more information you have, the less you know."

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