In a few days, we’ll reach the fifth anniversary of the fall of Lehman Brothers — the moment when a recession, which was bad enough, turned into something much scarier. Suddenly, we were looking at the real possibility of economic catastrophe.
And the catastrophe came.
Wait, you say, what catastrophe? Weren’t people warning about a second Great Depression? And that didn’t happen, did it? Yes, they were, and no, it didn’t — although the Greeks, the Spaniards, and others might not agree about that second point. The important thing, however, is to realize that there are degrees of disaster, that you can have an immense failure of economic policy that falls short of producing total collapse. And the failure of policy these past five years has, in fact, been immense.