Rising Tide

The international markets opened dizzily this morning. In Russia, they were suspended after plunging. The FTSE plunged, but appears to have largely recovered, at least in part responding to a 9 billion dollar government infusion from Belgian banks. The Bank of Japan pumped 29 million USD (3 trillion yen) into its money markets. At least the price of oil is tanking. Guess all those outside investors are feeling the pinch too. Yay, deregulated markets.

But the national mood continues to darken.

David Brooks discusses the Republican revolt yesterday here, and the desert of leadership authority it suggests. Getting compared to Smoot and Hawley should give many of these lawmakers more pause than I suspect it will.

The WaPo here suggests that the problem is that Republicans, bending to the will of powerfully negative voter calling, are essentially reflecting the reality that average Americans just don't understand the complexity of the current crisis. Steven Pearlstein is probably right about that, but then how many of those voters understand the farm bill that congressfolk renew every year? The whole reason we have representative government is so that the people we send to Washington can become specialists in complicated things and make informed decisions.

Richard Cohen muses on the socio-political influence of The Great Depression here.It's an interesting piece. Perhaps the best reflection:

"The Great Depression was not just a period of wholesale unemployment and incredible poverty -- of bread lines and apple-peddlers and women selling brief intimacy for 10 cents a dance. It was also the period of Hitler and Mussolini and, in this country, of Huey Long and Father Charles Coughlin, and the belief among otherwise sane people that communism was the remedy for what ailed us. An economic crisis is like war. It's impossible to contain. It affects everything it touches."

Clearly, Fascism isn't about to leap back out of some hidden political crevice (sorry, Stephen Ambrose), but the link between financial downturn and political instability cannot be denied.

Will they start calling it the First Depression, or Great Depression I? Neither seem very catchy.

*Update*
8:42am

So a couple of hours have elapsed, and the world's markets appear to be correcting. Not at all prepared to feel out of the woods, but it does raise one interesting question- what if the fundamental assumption of most of the world's economists, specifically that without some sort of bailout the US and probably world economy implode, is wrong?