A cycle has emerged in the economic mood of recent months: a round of bad news sends markets into a tailspin, then things appear to improve, complete with predictions that the worst is behind us, only to fall apart again, writes Steven Pearlstein in the Washington Post. It’s time now to realize that “this thing’s going down, fast and hard,” Pearlstein concludes, and it won't turn around any time soon. "We're caught in one of those vicious, downward spirals that, once it gets going, is very hard to pull out of."
“The real problem is that the underlying fundamentals” of the economy are unbalanced, and we need to restore that equilibrium by balancing what we consume and produce, allowing the dollar to fall naturally, tightening up bloated industries, and letting real-estate prices fit incomes. Pearlstein likens the crisis to flooding: “there's not much to do but flee to safety, rescue those in trouble and let nature take its course.”