Defcon One

I have a lot of respect for Fabius Maximus, who has been watching and commenting on the financial collapse for years now. His predictions, while couched in all the necessary social-science qualifications, have a very good track record. An exceptionally good track record. Today, according to FM, the US economy must move to "Defcon One." That, for those who don't know the terminology from the military side, is immedate readiness for full-scale war. Everything needs to be mobilized, or risk losing it all.

Paul Krugman agrees: this is not a typical recession. While he doesn't expect unemployment to rise to levels of the Great Depression, he thinks we are in an era of depression economics, when the usual tools of fical and monetary policy won't work. A former chairman of Goldman Sachs says the "economy faces a slump deeper than the Great Depression and a growing deficit threatens the credit of the United States itself."

I, for one, am glad I have tenure. A lot of people are going to feel a lot of pain before this is over. In 2004, 40 percent of American families were unable to survive on their assets for three months of unemployment. I imagine it's significantly worse now. It's not time to panic (which does no good anyway), but it is time--past time--to prepare.