As soon as I got back from my one-week visit to New York, despite pleas of jet-lag, everyone wants to know my instant (and no doubt comprehensive!) analysis of the US economy. “How bad is the recession? Is it going to get worse?” ...such and similar questions are asked and your wise columnist is expected to respond.

To start with, New York, where the wounded actors of the financial industry congregate, simply does not look or behave like a place struck by economic gloom and darkness. The city carries on with its own peculiar chutzpah and besides the weather is gorgeous! The dives of Manhattan which inspired Auden some 70 years ago seem to operate with great verve and aplomb. Sure, many are getting laid off, many fear getting laid off and everybody is both angry and cynical about Bear Stearns. But there appears to be a strange, unusual immunity gained from the last few decades of economic churn that this too shall pass... “talk to me not of familiar lays, but of new rhymes, new codas” could easily be the motto of New Yorkers of all ages and classes.

The hero of the day is clearly the understated Ben Bernanke. He inherited from his predecessor an unprecedented monetary bubble which sustained the myth that on Greenspan’s watch Americans, and much of the world, would not face bad times economically speaking. Unfortunately for Bernanke, his horoscope seems to be cast quite differently. On his watch, the United States and the rest of the world have walked into some of the most trying times in recent memory. Years ago, my friend Nadeem Ul Haque (now an “expert” with the largely out-of-date, largely irrelevant IMF) had passed on a key insight of his. More than World War II or Viet-Nam, the defining historical memory for most thinking Americans is the Great Depression. That a large, free, prosperous country could suddenly shut down perfectly good factories and offices, cut both production and consumption and descend into an impoverished state, seems frightening precisely because even now it is virtually impossible to believe that something like that could happen at all. Luckily for us, in contemporary times, the US Federal Reserve is headed by one who has done considerable academic research on the Great

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