What's Happening?

Kids. Work. House and yard. Pets. School. Most Americans have too much to do to become competent securities analysts, economic advisors or sociologists in their spare time. We leave those jobs to the professionals who are trained in those fields. We do our jobs, we expect those folks to do theirs.

All this news. Financial Crisis? Recession?

"You mean like the financial crisis of the late 80's, when the 'Savings & Loan' scandal supposedly cost American taxpayers $153 billion?(1) I didn't really feel that. I'm not sure it really affected me; my bank wasn't one of the ones that went under."

"You mean like the economic recessions of 1982, 1991, and 2001? I got through those alright. A few meals of Top Ramen, sure, but we got through it."

Many Americans perhaps barely noticed those episodes, and as the years go on, even for those American that were affected, the memories of the layoffs, inflation and difficulty finding a new job have mostly faded away. After all, we've seen all that came after. Those times don't seem so bad now; they are over.

The good news is that, yes, all recessions - even the grandaddy of them all, the Great Depression - come to an end sometime.

The bad news is that the economic crisis of 2008 isn't your average once-in-a-decade recession. This is one of those once-in-a-century economic storms. This one has just started, and we are going to see things and have to deal with things that we haven't had to deal with ever in our lifetimes before.

We can do it. We've done it before as Americans, our spirit shines through every challenge and crisis. We're tough, we can take the hits and we can figure things out quickly.

We do still have kids, work, house and yard, pets and school to manage, though. We still don't have time to really study what went wrong in the complex financial instruments and derivatives markets. We still don't have the time to study what is really changing at a sociological level, and figure out what we need to know to make this a shorter crisis, to recover as quickly as possible, and to reconstruct things so this kind of economic catastrophe doesn't happen again.

That's where this blog can maybe help. Key concepts, boiled-down and short explanations of what is happening and how it affects things, and plain ideas on how the average American can best weather this crisis.

We are entering a season of economic winter in America. It will likely be the longest and coldest economic winter you will ever experience. Some moments of winter are cold and icy, and others are like ski lodge fires with mulled cider. With a focus on what we can do to understand and help each other, we can all be fires of warmth and aid in the upcoming winter.

Here's to creating healthy, happy hearths of winter fires.

---

(1) These numbers apply to losses incurred between 1986 and 1995, the most expensive phase of the crisis. See The Cost of the Savings and Loan Crisis: Truth and Consequences, Timothy Curry and Lynn Shibut, FDIC Banking Review, FDIC Banking Review, volume 13, no.2, December 2000. With thanks to Ambit ERisk for the reference.