United We Fall?

The "Today's Papers" header at Slate was so cute, and apt, that I had to steal it -- with the addition of a question mark. The point, of course, concerns the nausea-inducing drop in world stock markets as an indication that the global market is more interdependent than perhaps many of us would like: European and Asian investors seem to be unnerved by rumors of an imminent U.S. recession. As "The New York Times" puts it, in a passage "Slate" cites as well: "The angst about the United States belies the popular theory that Europe and Asia are not as dependent on the American economy as they once were." It might be more precise to say that what it belies is the theory, popular or not, that Europe and Asia do not believe themselves to be independent of the U.S. Whether that accurately reflects the facts is another matter, and one that remains to be seen. Of course James Carville's law of politics -- "It's the economy, stupid"-- becomes, when applied to the economy: "It's psychology, stupid!" --But there may still be time for investors to rally and come to their senses, a possibility the Times acknowledges with its follow-up article today: "To Some, the Widening Crisis Seems Driven By Fear, Not Facts."