The stock market has experienced a big sell-off over the last few trading days. Today the obligatory Great Depression B&W photo has been trotted out on CNN, adorning an article by David Frum. It’s a dogma, you see, that depressions are signaled and perhaps even caused by sell-offs on the New York Stock Exchange. That isn’t true, but it doesn’t matter that it isn’t true. Dogma trumps truth in this instance.
What follows the photo is like, I don’t know, a little checklist. First Frum asks: “What’s the problem?” Then he cites four “factors”. You know, bullet point 1, then 2 then 3. Then the last one, 4, which opines that the “economy”, whatever that is, isn’t “growing” fast enough.
The word “debt” does not even appear in the entire article. As if the economic problems have nothing to do with debt, even though we just got through this whole “debt ceiling” thing and the big news over the weekend was that USG “debt” had been “downgraded”.
Frum provides good insight into the mindset of the Powers That Be. And that mindset can be summed up in two words: pathological denial.
Let me review just a little bit of recent history on this. The current slide – and this is just the current slide, there is a much longer view that could be considered but this is not the time – began with the so-called “subprime” crisis around 2007. That’s four years ago now.