Conventional wisdom. Painfully conventional wisdom.
Hindsight is always 20/20 for mainstream media. Witness Steve Pearlstein's column in today's Washington Post:
The turmoil we're witnessing in global financial markets is nothing less than the popping of an enormous credit bubble that built up over the past five years, artificially inflating the market prices of stocks, bonds and real estate. It created a bonanza for Wall Street investment houses and private-equity funds and fueled the longest and strongest period of global economic growth in modern history.
Now they tell Joe Sixpack. Of course, they're still clueless about root causes:
A credit bubble develops when there's too much money to lend and too few places to lend it. A world capital glut has been created by the impending retirement of the baby-boom generation and the globalization of finance, which has made the savings of billions of people in developing countries available for investment overseas.
Don't worry if that explanation makes no sense to you. It doesn't to me either.
The real explanation still escapes nearly everyone in the business media. So let me lay it out in terms as plain as I can muster: It's the money supply, stupid! It's the ceaseless expansion of worthless paper money by the worthless Federal Reserve! And it's especially the most recent expansion that began with your sainted "Maestro," Alan Greenspan, who goosed up the money supply with still more worthless paper money to avert the consequences of the dot-com bomb!
There, that feels better. Once in a while I must channel my inner Mogambo.