THOSE PERIODIC CRISES OF OVERPRODUCTION. Here's the Chicago Tribune (requires registration): "Businesses can produce far more than we need. Supply has simply outstripped demand. When that happens, production slows, equipment sits idle, costs go up, workers are laid off and investments are postponed.

The capacity glut exists on a scale that this country and many others haven't seen for decades, and it at least partially explains why it is so difficult for the American economy to shake off a recession that by all measures seemed mild." How many times do we have to explain that Karl Marx is a minor post-Ricardian? Prices fall, the return on some kinds of investments fall, the attractiveness of other kinds of investments rise. The underlying problem is irreversibilities: people skilled in doing one sort of thing do not automatically morph into experts in some other thing.