U.S. Economy: The Turnaround Will Take Time

by: Michael Panzner

One unfortunate consequence of years of hubristically misguided monetary and fiscal policies is the popular notion that if you dig deep enough into a bag of economic tricks, you will invariably find "solutions" to whatever challenges come our way.

Yet what people often forget is that when the element of time has played a major role in spawning broad-based economic and financial woes, history suggests that the passage of days, months, and years is invariably a feature of any turnaround.

In other words, the only way you can really solve problems that were decades in the making is to stop trying to prolong the agony and, instead, allow enough time for the excesses and imbalances to work themselves out.

And even then, it might not mean the "patient" will return to the picture of health. Sometimes, the damage that has been done, or other ailments that were acquired along the way, point to a more crippling, more pervasive malaise.

In discussing today's America, could that be what Wall Street Journal columnist Peggy Noonan is referring to in "There's No Pill for This Kind of Depression"?

Six months after the collapse, a "pandemic of fear."

It is six months since Lehman fell and the crash (or the great recession, or the collapse—it's time it got its name) began. An aspect of the story given less attention than it is due, perhaps because it doesn't lend itself to statistics, is the psychic woe beneath the economic blow. There are two parts to this. One is that we have arrived at the first fatigue. The heart-pumping drama of last September is gone, replaced by the drip-drip-drip of pink slips, foreclosures and closed stores. We are tired. It doesn't feel like 1929, but 1930. People are in a kind of suspended alarm, waiting for the future to unspool and not expecting it to unspool happily.

Two, the economy isn't the only reason for our unease. There's more to it. People sense something slipping away, a world receding, not only an economic one but a world of old structures, old ways and assumptions. People don't talk about this much because it's too big, but I suspect more than a few see themselves, deep down, as "the designated mourner," from the title of the Wallace Shawn play.

I asked a friend, a perceptive writer, if he is seeing what I'm seeing. Yes, he said, there is "a pervasive sense of anxiety, as though everyone feels they're on thin ice." He wonders if it's "maybe a sense that we've had it too easy in the years since 9/11 and that the bad guys are about to appear on the horizon." An attorney in a Park Avenue firm said, "Things look like they have changed and may not come back." He contrasted the feeling now on the streets with 2001. "Things are subdued. . . . Nine-eleven was brutal and graphic. Yet because there was real death and loss of life folks could grieve and then move on." But today, "the dread is chronic. . . . Tom Wolfe's Masters of the Universe were supposed to be invincible. The pillars of media were supposed to be there forever. The lawyers were supposed to feed through thick and thin. Not anymore." He quoted Ecclesiastes: "The heart of the wise is in the house of mourning; but the heart of fools is in the house of mirth." We are worried, he said, "about a way of life, about the loss of upward trajectory."