More About Wall Street and Main Street

Did I say that James Kunstler's outlook is pessimistic? I hope you get elegant understatement. I meant to say that he is positively apocalyptic in his outlook. So to balance out those doomsday pronouncements, I also read more measured analyses. For example, there is Robert Salomon, professor of business at the Stern School of Business at New York University. His blog posts also parse the details of the dreadful news that seems to pour out every day from Wall Street, Washington, D.C., London and Los Angeles. Like Kunstler, Salomon is downbeat but the academic calm helps to put things into perspective and doesn't send me rushing around the house in a panic-stricken tizzy, wondering if I should stock up water and firewood.

In fact, sifting through financial commentary on the internet has been amazing self-education. I have found some real gems of postings and articles in unlikely places that have helped me, a non-specialist, to understand both the bigger picture and the details of the current downturn. E.g., from the rather apocalyptic sounding website, dollarcollapse, I linked to this really well-written article in Harper's magazine that helped me understand some of what is going on. According to Eric Janszen, the American economy has shifted from a boom-bust cycle, a traditional business cycle model, to a bubble model. It is quite fascinating but I wonder, could it be true? Could the American economy have been transformed into a giant Ponzi scheme where the loser is the last sucker left holding the (now empty) bag? I need to discuss this with more economics-educated friends.

In the meantime, as I run errands in the various little downtowns of the various little towns in Fairfield County (OK, just two or three neighboring towns), I see nothing really amiss. People are still shopping, ordering salads for their lunches, eating ice cream. There are no mobs breaking down the banks or breaking into stores. In fact, calmness prevails everywhere. I hope the adjustment - and of that I am sure, a major adjustment is coming - will be like this. Calm, gradual transition to a newer, less costly system. The alternative is too awful to think about.