For years there's been a lunatic fringe of economic commentators warning that Alan Greenspan with his easy credit, hedge-fund rocket scientists with their massive leverage, and i-bankers with that ever expanding array of abstruse financial products were creating imbalances that would ultimately bring about a Great Depression, Part Deux. In practical terms, they predicted that the financial sector would collapse, consumer demand would be destroyed by either deflation or inflation, and our young people would be lucky to get gigs working as nannies in China.
This view has been steadily ascending the rungs in public debate from being sheer madness to rather extreme to vaguely plausible to a generally acknowledged possibility. In the New York Times, for instance, the words depression and economy have been cropping up together in stories a lot more frequently of late: in September 2007 there were nine instances; last month, there were 18; and this month there have been 70. If the current trajectory holds, in a month or two the new economic depression will not only become conventional wisdom, it will be mentioned in every single story in the Times, even in the Home and Garden section. And, you know, could be worse, right?