I know exactly how you feel.

Coincidentally, I just happened to read an article in the Wall Street Journal that says pretty much the opposite of the article you found (complete with nifty graphic):

Economy May Face Prolonged Pain, History Suggests - WSJ.com

The worst of the financial pain may have passed, but the economic pain could be just starting. The nation's financial markets have rallied since early March, with stocks up and yields on risky corporate and mortgage-backed bonds falling relative to safe U.S. Treasurys. Optimists got an added boost Friday from a government report that U.S. unemployment fell in April. But history suggests celebration may be premature. It's common in a crisis for markets to hit bottom long before the economy does. That's because markets are forward-looking and because economic weakness is the way the underlying imbalances that produced a crisis are corrected. "The financial crisis is usually an expression of broader problems in the economy," says Harvard University economist Kenneth Rogoff, who along with Carmen Reinhart of the University of Maryland, recently wrote a history of financial crises back to the 1300s. "It's a mechanism that exacerbates and deepens the recession, but it's seldom the trigger." <...>

The risk for the U.S. is that weakness goes beyond the correction of housing excesses and begins to feed back into the financial system and then, again, hurts the wider economy. By contrast, says Nouriel Roubini, an economist who heads RGE Monitor, a financial- and economic-forecasting service, the U.S. financial system has adjusted only to the losses on mortgage loans. He predicts that a wave of defaults on industrial loans, municipal bonds and consumer credit is coming, which will trigger another wave of financial-system distress. Fed Chairman Ben Bernanke believes such feedback effects are what made the Great Depression great. Mr. Bernanke's awareness of such risks is why he cut rates last week and, despite signaling a pause, is still focused on the risks that the U.S. economy may deteriorate further.

OK, here goes ... {cough}

SCENARIO:
... one of the people who did not see the collapse of the housing bubble, and who admits that he didn't think it was a big deal when it started collapsing, looks around at the economic picture, and sees nothing to worry about.

ECONOMIC ANALYSIS:
The writer (quoted writer, not quoting writer!) has demonstrated an inability to see a coming economic crisis in the biggest economic crisis to appear in the past decade, called well in advance by a large number of people who were dismissed at the time as "doom-sayers".

Ergo, his inability to see any further problems is a data point about the author, not a data point about the economy, and there is nothing here on which to base an analysis of the economy.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

It really doesn't have to be a massive train wreck for this crisis to be quite painful and, in fact, expose some of the more unfortunate aspects of anglo-saxon financial capitalism. Think of this one as a slow train wreck, similar to Japan's lost decade, with the difference that the anglo-saxon econmies don't have Japan's solidarity mechanisms, the the pain will be worse for the bottom tiers.

But I don't think anyone said this would be the crisis that tipped things over...certainly not me. Just a long period of stagnation.

But people are catching on, slowly. And, next time...

And it may in fact be in my lifetime.

The Hun is always either at your throat or at your feet. Winston Churchill

And I also find his attempt to include France amongst the bubbly countries somewhat pathetic (but hey, now the IMF said it was so, who is he to argue with them?).

In the long run, we're all dead. John Maynard Keynes

The much bigger point, surely, is that the current crisis is exacerbated by and highlights a much sharper shift in economic power from the middle and working classes to the wealthiest amongst us within developed societies.  Whereas previously it appeared that "a rising tide lifts all boats" it has now become abundantly clear that this has only been possible because of asset inflation and huge and unsustainable borrowing based on those inflated assets.

Now that the bubble has burst the huge rise in inequality is there for all to see - in the form of house foreclosures, negative equity, rising unemployment, cutbacks in public services, reducing (fixed contribution rather than fixed benefit) pensions, and inflation as a tax on all, unmatched by wages.  

In the meantime the super rich who have creamed off all the wealth in the good times have moved their assets offshore, and if they were greedy enough to have stayed in too long, have been baled out by the central banks at the taxpayers expense in terms of taxes and inflation.

Globalisation has created a whole new class of the super rich who are not too bother by the performance of any single economy, and not at all bothered by "the common good" in their "home" economy - a laughable concept for them.

You simply move your assets offshore and invest in "emerging markets", take advantage of tax shelters and loosely regulated jurisdictions, and destroy any attempts at global governance by the EU, UN or a plethora of international agencies.

Global corporates are effectively beyond governance because they can move their "Headquarters" to the jurisdiction of least resistance.  We may not be in a depression, or even a technical recession, but there has been a massive transfer of wealth and opportunity from the middle and working classes to a new global super bourgeoisie.  Thus even with positive nominal GNP/GDP growth there are no extra jobs, no extra funds for social services, and living standards stagnate despite headline pay increases above the nominal (and largely spurious) rate of inflation.

My worry is that we are allowing the terms of the debate to edit out these intra -societal wealth transfers, with no mention of the development of supranational elites for whom their is no effective governance at all.  For them their "country" is merely a historical accident or a flag of convenience.  Their patriotism a conceit to fool the gullible.

The Anglo Disease isn't really a disease at all.  It is merely class war under a different name.

"It's a mystery to me - the game commences, For the usual fee - plus expenses, Confidential information - it's in my diary..."

In one, a maverick president suffers bad media bias about his actually great economic performance.

In the other universe, people are being broken.