The Economy: Failure of Nerve

The strangest aspect of the current minidepression, by far the deepest since the 1937-38 episode, is the almost passive reaction of the unemployed, the principal victims, and the bewilderment of economic experts who a few years ago were certain that they could fine-tune the economy in both boom and recession. This mildness of affect among workers in such hard-hit industries as autos, construction, appliances, and apparel is presumably related to the suddenness and unexpectedness of the blue-collar crisis and to the availability of such income maintenance cushions as supplementary unemployment benefits (which in autos ran out in the spring of 1975), food stamps, and unemployment insurance (whose duration has been extended by Congress). Bu...