how much wood could a woodchuck chuck?

$11,200,000,000,000. That's the price tag that economists have put on the financial crisis, in terms of asset valuation, for Americans, and that's only for 2008. This is a very large number. It's large enough, in fact, to make me resort to proper capitalization. Now, we've seen a lot of big numbers--$700 billion, $1 trillion, $2 trillion--and, inevitably, will become numb to them. After all, such sums of money are so vast that they might as well be unreal. It isn't like $11,200 billion (that's British shorthand, for all of you yokels) was burned by pa and the boys out by the old creek in December. It's the amount of money that buyers believe American assets are no longer worth. That wouldn't be so bad, if those assets didn't amount to a lot of bubkiss; if, for instance, Americans owned a lot of workshops or, I don't know, ice cream parlors, we could still produce things even if the land and the building wasn't going to command the same price. Too bad we decided to buy real estate, a scheme that has never, ever failed. So now we've got a lot of unproductive assets whose only real value was as expensive collateral for an overly generous credit market. I know that none of this is new to anyone on the blog, or, really, to anyone who's been following the news for the six months. I'm only reiterating it to somehow express my sense of shock and to underscore again how consequential this period of history will be, and for who the bell is gonna toll. European banks might be bunk, but Europeans have productive assets. Their ability to produce goods for which there will be continuing demand guarantees that they will be able to rebuild capital stocks, even if slowly. But America? Once we've hit bottom--and who knows how many more trillions will have to be shed--we're going to be in very bad shape to start climbing again. What do we do with all of these houses? And what do we do when we no longer have so much money on paper to wave around in the world's face? Are we really going to be as attractive an option for investment? How will we even manage the economic structure we've built with ourself, one which does not offer, but demands, heavy borrowing, when our equity has fallen to 30 or 20% of our obligations? How will people go to college--how will they secure financing when they have little or no collateral to offer and schools still expect to be paid a middle manager's salary every year? I'm afraid that hard questions like this won't be asked, or will be answered with the usual bag of tricks and delaying tactics.

In the end, the issue of the day will be whether or not Americans have denuded their capacity for collective action so much that they're unable to engage in the social engineering project of the millenia. I know that this is particularly millenarian and I apologize for the tone, but when you wipe, in a single year, your gross annual output from the books, with the worst yet to come, I don't see how a little soul-searching can be avoided. And to know that the whole social context that you've lived in was built on is completely and irreversibly untenable? What, then?