Gregg Easterbrook wants you to calm the fuck down

Tucked into this week's Tuesday Morning Quarterback column is the kind of measured, rational assessment of the financial crisis one would expect from a brain like Gregg Easterbrook's. While this column is required weekly reading as far as I'm concerned, those of you disinclined to give two shits about professional football would still do well to read the Gasoline Plentiful, Perspective Scarce section, conveniently linked HERE.

Small taste below the fold.

What is going on is a financial panic, not an economic collapse. Financial panics are no fun, especially for anyone who needs to cash out an asset right now for retirement, college and so on. But financial panics occur cyclically and are not necessarily devastating. The most recent financial panic was 1987, when the stock market fell 23 percent in a single day. Pundits and politicians instantly began talking about another Depression, about the "end of Wall Street." The 1987 panic had zero lasting economic consequences -- no recession began, and in less than two years, stocks had recouped all losses. (See John Gordon's excellent 2004 book on the history of financial panics, "An Empire of Wealth.") Perhaps a recession will be triggered by the current financial panic, but it may not necessarily be severe.

And the punch line is, we borrowed all the money from China! Oh man, that's hilarious!

Politicians and pundits are competing to see who can act most panicked and use the most exaggerated claims about economic crisis -- yet the fundamentals of the U.S. economy are, in fact, strong. Productivity is high; innovation is high; the workforce is robust and well-educated; unemployment is troubling at 6.1 percent, but nothing compared to the recent past, such as 11.8 percent unemployment in 1992; there are no shortages of resources, energy or goods...