Hey, you know what’s rare? Home prices doubling in five years while wages are flat. A housing bubble and credit bubble exploding one after the other. An unregulated, opaque market in derivatives growing to $600 trillion. The U.S. government guaranteeing the private debts of the banking sector to prevent a total collapse of the entire financial system. A continent’s worth of sovereign debt crises, all at the same time.
I’m not as depressed as Paul Krugman seems to be, but let’s at least be realistic. Sure, a double-dip recession is “rare,” but so is everything that’s happened the past three years. Rare is not a synonym for never. Just because the brain surgeons who didn’t see the first recession coming, from Ben Bernanke to Larry Kudlow, are telling you there won’t be a relapse doesn’t make it so. If you ignored the biggest tornado in 80 years until it rode up behind you and swept your sorry self into Oz, why should anybody assume you have suddenly, inexplicably turned into The Amazing Kreskin?
I don’t know where the economy’s going. If I did, I’d be running a hedge fund in Connecticut and collecting 2 and 20. But nobody else does either, and to just blithely ignore a very real risk just because it’s “rare,” after all the awful rarities that have befallen us these past few years, well, you’re either an ostrich, an ideologue, or a central banker trying to jawbone the nation into a recovery that you can’t engineer.