Why are job losses so much worse than first thought? It’s due to the savage nature of a recession that has shredded jobs in California.

via California job losses grow – ContraCostaTimes.com.

I love that quotation because it demonstrates so perfectly the delusions that are taken for granted.

Recessions are never “savage” or “mild.”  Such explanations are meaningless.  What was savage was the government’s (Federal Reserve policy) cut in interest rates earlier in the decade.  This provided “free money” for investors who had every incentive to speculate and no incentive for anyone to save.

We had a savage bubble.  The bust is just the vacuum left when it pops.