Jesse's Cafe Americain' has an interesting article about the parallels between now and the great depression. He writes that during the 1930s policy makers (e.g., Pres. Hoover) and everyday people alike had a difficult time acknowledging the anomalous nature of the situation until symptoms became extreme.
Today during my reading group, we talked about the difficulty policy makers have in recognizing the degree of problems in the system because of their convictions that "markets" work. The undergirding assumption is that if we simply free up the market, or if we simply implement market friendly reforms more completely, the recession will ease.
However, as one participant in my group said, what people fail to realize is that the crisis IS markets working. Freed markets do precisely this--leverage in order to accumulate until a bubble begins to inflate.
Capitalism is simply an unsustainable system. It operates through accumulations, leverage, exploitation. and crisis.
The question is how to allow "enterprise" without the mindless consumption/accumulation/exploitation of a capitalist system that is exhausting resources and dispossessing the majority of the world's population?