With all the dramatic breaking news, plunging markets and hand wringing you would almost think that we had reached capitulation day.Unfortunately though (especially for those caught unprepared), we have only just tipped over the edge of an abyss with a bottom that is many years deep.
It appears pretty clear now that the veil of absurd optimism has lifted significantly and, at least for the moment, has given us a long hard stare at the new reality.
Sure, there will be some who continue to deny the obvious and spin a good tale (Don Luskin, Jerry Bowyer, Brian Wesbury, Mark Perry, Larry Kudlow) but these folks are simply relics of a bygone era with nothing left but empty ideals and misguided philosophy to fluff their egos while attempting to fool ours.
With each passing crisis, each slump of the stock market, each bankruptcy and foreclosure we are getting further and further from a brief economic expansion that now seems all too obvious to have been baked primarily on households and firms confusion of debt with wealth.
As we continue the slide into malaise it’s all but certain that our collective memory will soon forget or otherwise disregard that false boom period as the reminiscence of the tumultuous period of the dot-com collapse washes over and into the deteriorating period we now live.
Eventually, there will be general recognition that we clearly have entered into a secular period of continuous recession with no obvious growth drivers and countless liabilities from the ills of our past.
Make no mistake, unemployment, the one truly destructive economic force, has only just started its ascent with destinations all but unknown but effects all too certainly disastrous.
So, with solemn fanfare let’s all say goodbye to the charade and at least be grateful that soon we will (almost) all be on the same page.
