Recovery Summer Dead. See you in November

Black Wednesday and the 2010 midterms James Pethokoukis

More. Amity Shlaes: Lousy lawmakers, not low taxes, created fiscal woes

Michael Barone: Obama's State Capitalism: A Failure of Modesty. In part:

They can add that the threat of pending regulations interpreting the health care and financial regulation bills and of pending tax increases as the Bush cuts expire have created a climate of uncertainty in which consumers don't consume, banks don't lend and businesses don't create jobs.

All true. But in this summer of unrecovery, it's still important to understand how so many smart people got so much so wrong.

One answer comes from economist Arnold Kling writing for american.com. Kling argues that the collapse of the housing market and the financial crisis disrupted what had been "a sustainable pattern of specialization and trade" and that we need to let the market economy develop a new one.

Here's Kling's article.

More. About that stimulus:

The striking observation is that after correcting for the higher starting point, the actual performance of the economy is almost exactly what Romer and Bernstein said would happen if we had done nothing, rather than passing the $800 billion package.

More. Paul Krugman Concedes Defeat to Paul Ryan?

Cartoon by Michael Ramirez