The Economy: Even Worse than You Think

I attended a private gathering of workers in the financial industry and came away with a sobering recognition: the economy is much, much worse than we think. That’s saying a lot given the dire tone of local headlines, such as those in the Globe and the Herald.

Perhaps I was just picking up on the immediate reaction of workers watching the results of the Bear Stearns meltdown first hand. But I got a very real sense that people are absolutely freaked out.

I never understood the deep financial worries and profound fiscal conservatism of my grandparents, who lived through the Great Depression. But they were adults as customers lined up to take money out of banks which couldn’t give it to them because they didn’t have it. The bank runs and gripping financial hardships of that time traumatized them. We all have to hope that those days will never return. The fact that the current troubles have brought even discussion of such possibilities forward is terrifying.

In addition, given the relative youth of those in the financial industry, I’m also worried that it lacks individuals who have a sense of history and perspective. Many financial specialists today only know boom times and the boom market. Aside from the blip of the bursting of the technology bubble in 2000, most have almost no experience with bad times. Black Monday was more than two decades ago. The youngest people with experience of that day are in their early 40s.

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