Thoughts on the economy from WEEKLY STANDARD contributing editor Irwin M. Stelzer:
Perspective, please. Share prices are down about 5-7 percent compared with this time last year, hardly something to panic about; bank losses are 0.7 percent of GDP compared with 2.5 percent in the S&L crisis; and interest rates are coming down -- which will lower mortgage rates and re-set rates, either as stated in the mortgages or as the lenders will be willing and able to negotiate them. The stimulus Bush and the congress are negotiating should hit the economy by mid-summer, by which time the Fed will have cut rates some more; and the European Central Bank and the Chinese authorities will have switched from hold-the-line to rate cutting. Not all will be well with the world, but neither will capitalism collapse. Longer-term, of course, the relative position of the United States will be harmed -- the dollar less significant a reserve currency, and portions of major institutions owned by sovereign wealth funds of countries not necessarily our friends. But that's a policy dispute for another day.
For more from Stelzer, see " Prepare to Be Stimulated" in this week's issue.