BEN BERNANKE WILL decide later today whether the recent turmoil in financial markets, and the apparent slowdown in the “real economy,” warrant some action on his part–or whether to stand pat and see whether his recent moves to break the credit logjam are working. Meanwhile, and perhaps more important, we have to decide whether to worry whether the credit crunch and, among other signals, the recent bad news from the jobs market foretell longer-term problems for the U.S. economy.
One clue to the answer is to be found in the economy’s performance after Islamic terrorists dealt what they thought was a lethal blow to American capitalism by bringing down the World Trade Center towers some six years ago, in the process wiping out important financial firms and forcing the closing of the New York Stock Exchange and other exchanges. Surely, Bin Laden had demonstrated that his version of god trumped Mammon.
