Peggy Noonan, writing in today’s Wall Street Journal notices a mysterious phenomenon of the meltdown:
One of the weirdest, most perceptually jarring things about the economic crisis is that everything looks the same. We are told every day and in every news venue that we are in Great Depression II, that we are in a crisis, a cataclysm, a meltdown, the credit crunch from hell, that we will lose millions of jobs, and that the great abundance is over and may never return. Three great investment banks have fallen while a fourth totters, and the Dow Jones Industrial Average has fallen 31% in six months. And yet when you free yourself from media and go outside for a walk, everything looks . . . the same.
Everyone is dressed the same. Everyone looks as comfortable as they did three years ago, at the height of prosperity. The mall is still there, and people are still walking into the stores and daydreaming with half-full carts in aisle 3. Everyone’s still overweight. (An evolutionary biologist will someday write a paper positing that the reason for the obesity epidemic of the past decade is that we were storing up food like squirrels and bears, driven by an unconscious anthropomorphic knowledge that a time of great want was coming. Yes, I know it will be idiotic.) But the point is: Nothing looks different.
You don’t even need to free yourself from the media. Just stay away from the news media and financial media. Especially stay away from CNBC and the Wall Street Journal. You would hardly know anything unusual was happening at all. If you’re watching football, or network prime-time offerings, or anything non-news on cable, you might get the occasional knowing topical reference, but that’s all.
The main way entertainment viewers are exposed to the economy is through advertising, and advertising hasn’t changed. We’re still flocking to the malls, these ads tell us, and hauling back a bounty for Christmas morning. We’re told to expect Big Savings For a Limited Time Only, but that’s nothing new. We’ve had pre-Christmas sales routinely for years. The results from Black Friday’s post-Thanksgiving retail sales apparently weren’t too bad. The biggest story to emerge from the official kickoff to Christmas buying suggests consumers are in a frenzy to spend.
Why isn’t the meltdown making its presence known more dramatically? Noonan cites an unnamed economist who gives her the good news, then the bad news:
I asked an economic expert a few weeks ago if a second Great Depression would come to look at all like that, like a catastrophe, and he said no, not at all. In 1930 we had no safety net. Unemployment benefits, food stamps, welfare, an interlocking system of city, state and federal services—these things will keep it from being so bad.
But in tough times we will surely expand unemployment benefits, and welfare, and food stamps and housing assistance, which will mean more and greatly accelerated spending, which will mean bigger and steeper deficits, and higher taxes, with the one feeding on the other, which may mean an economic death spiral comparable to, say, Britain in the decades after World War II, its economy mired and held down by government control and demands. It continued more than a quarter century, until the change of economic thinking encapsulated in the phrase “the Thatcher years.” Is that what this will be?
Today’s Great Depression, Noonan says, exists “mostly in conversations between wives and husbands, in families and among friends, about selling, about digging in, about layoffs, and not taking chances, and reduced income, and fear.” Decisions that arise from such conversations are the stuff meltdowns are made of.
