Yglesias highlights the way that we’re dealing with the current credit crisis, and the much worse one we should have had.

Money quote:

There was no particular reason to believe that this crisis would lead to a prolonged period of mass unemployment since the dollar crash would facilitate exports (including tourism) and import-competing industries, but it would very possibly create a stubbord residual of long-term unemployed people. What’s more, it would be a prolonged crisis in American living standards. The good news, from the standpoint of the policy wonk, is that it would be a very intellectually interesting prolonged crisis in American living standards. It would require all kinds of fascinating big ideas to explain how this could have happened and how to chart the way forward. And precisely because lots of smart people foresaw the occurrence of that crisis, and because that crisis really seemed very likely, and since a crisis certainly did happen a diverse array of smart people have just sort of trundled along acting as if the crisis we’re facing is that crisis.

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