The running of the bulls

Apologies for any grammatical gaffes; I write with frantic urgency tonight.

Because this is bad. Actually, bad doesn't begin to describe it.

Greenspan calls it the worst economy in a century. Robert Peston of BBC News? "Meltdown Monday." The Associated Press summed it up in a word: "stunning."

That it is.

I'm a young guy. I've got some vague memories from the old Bush Administration rattling around in my mind; as a doctoral student in history I know my Americana.

But I was a Clinton kid. I entered and just about left my teenage years while Bubba ran things. I remember "it's the economy, stupid" (and my outrage over Clinton mocking an old man). I remember the late great Peter Jennings wondering whether computers had banished recession to the trashbin of history. I remember members of Clinton's administration lecturing the Japanese about their economic failings. And yes, I watched Wall $treet Week with Louis Rukeyser, when the biggest news week in, week out was just how high the stockmarket had climbed. I didn't know what it meant back then - but I did know it was good. The economic crises I learned about in those boring highschool classes? Ah, the folly of the ancients. The future was bright, the west ascendent . . . BORING!

What a difference a little George W. makes. Okay, it's not all his fault. It would be simplistic to assume that even a President has absolute control over the vast machinery of our global economy. So let's look at the past eight years from an entirely economic perspective, leaving politics aside for now.

The picture is pretty bleak.

Instability in the Middle East; skyrocketing fuel prices. Failing airlines; a teetering industrial sector (although, how's Halliburton doing these days?). The export not only of low-level manufacturing jobs to the third world but, increasingly, of high-level technical and scientific positions to Europe and Asia. Booming unemployment; plummeting consumer confidence.

The camel was overburdened, but it wasn't a straw that broke its back. Instead, a ten-ton boulder: the credit crisis or, more accurately, the subprime mortgage crisis. Essentially the U.S. housing bubble burst: risk was undervalued, loans given too easily. It's the sort of thing that could stagger a robust economy, let alone that dead man walking Bush had called promising (okay, I can't help incorporating some politics - especially when this is happening).

Is this a good time to mention that one academic who foresaw the crisis years in advance is called Toby Daglish? No?

In the last week things got worse. Credit is kind of important to a modern economy; among other things, it's what drives major purchases and powers the market. And Wall Street bankers discovered they had made their share of bad loans. On September 7 the Federal Housing Finance Agency formally took over Fannie Mae and Freddie Mae, two firms that owned or guaranteed about $12 trillion dollars in the mortgage market.

And then today, for Wall Street "the most extraordinary 24 hours since the late 1920s." Merril Lynch, a financial services and insurance firm, swallowed by the Bank of America. Lehman Brothers, the fourth-largest U.S. investment bank, announcing bankruptcy. That's $700 billion . . . gone. And insurance giant AIG, teetering on the precipice of disaster. Oh, by the way: a nosedive in stock markets around the world not seen since September 11.

Through it all home values keep falling, and the subprime mortgage crisis continues, intensifies, a fire that can perhaps only end with the destruction of the forest.

Remember when pundits and party hacks bickered about whether we were really in a recession? The question now is just how bad things can get. Just like I had a certain fascination in seeing how high the markets could go when I turned to PBS in the Clinton years, now I feel a morbid, sinister sort of curiosity when Wolf Blitzer's bearded mug flickers across my TV. How many billions lost today? What news from the front? And could this be the beginning of the end for America's economic hegemony?

I'm no economic expert - not even close. Actually, the most I know about these things concerns the pre-war state of the Nazi economy. So beyond this vague, nightmarish outline and my own surging worry I can't sketch a clearer picture.

But at least the politicians are keeping up to date on things. Right?

Quoth New Jersey Gov. Jon Corzine: “I do not understand how we got into this situation."

Just what we need to hear.