Banker's error again

The author argues that we misinterpreted the crash as a recession and caused our estimates to be over optimistic, hence the revisions and bouts of mass hysteria:

The Second Great Contraction 

Why argue about semantics? Well, imagine you have pneumonia, but you think it is only a bad cold. You could easily fail to take the right medicine, and you would certainly expect your life to return to normal much faster than is realistic.

In a conventional recession, the resumption of growth implies a reasonably brisk return to normalcy. The economy not only regains its lost ground, but, within a year, it typically catches up to its rising long-run trend.

HT Thoma
A lot of this had to do with referring to the crisis as cyclical so that Keynesian stimulus applies, that is, change the economy to fit the theory.

Folks who understood the impact of information technology got what was happening right away. The Internet is White Hot in McLuhan terms and high bandwidth, efficiently encoded  in the Shannon sense. Compared to the previous waves of information technology it was clear that major restructuring was going to happen.

Energy shortages are the primary artifact mainly because these information transformations effect transportation. From the beginning the model was the Great Depression with its Hot technology, broadcast radio; panic of 1907 and telephone switchboards, long depression and overseas cable, Gutenberg press and religious wars, rotary press and 1820 and so on and so on and so on.

Happily we have very deep reserves of technology and unlimited solar energy to solve the problem.