Tulipmania

It has been said that an economist is an expert who will know tomorrow why the things he predicted yesterday did not come true today. The adage came to me today as I reflected on comments I heard this past Saturday that the credit market would dry up by today.

Tulipmania was the name given for a craze that occurred in Holland in the 1630s when gobs and gobs of people -- rich and poor alike -- wanted to get in on the act of making profits off the flower. They bought tulips and took advantage of an irrational exuberance for the dainty flower. Certain colors fetched more money and before too long, no one wanted to buy the flowers at the going rate. The Netherlands government was called up to bail out the buyers and nothing worked until the speculative bubble burst and people lost interest. Anyone remember the Pets DOT COM stuff of the late 1990s.

Today's financial crisis is about the credit market rather than tulips. This issue has been an elusive beast for me to grapple with. Until, I cam across this gem. This article makes things a lot more clear. It is very well done and brings the rest of the world up to speed on this crisis. It comes from two writers at McClatchey news service's DC bureau.

By the way, these guys spend a lot of time answering questions from plain old readers about the shaky economy, which I must say is a great service. Reporters Tony Hall and David Pugh are taking their profession to a higher level and that is a good development.