Holy cow, Mary Jane, hold on to your chinchilla, we're heading into a liquidity crisis! Out of the blue a few weeks ago, Berkeley economist J. Bradford DeLong realized this and announced it to the world, or at least to those glued to Bloomberg screens. DeLong accompanied his realization with a full orchestra. His headline, "The Sorrow and the Pity of Another Liquidity Trap," equated the event with, well, the Holocaust, which seemed a little much; and he apologized to sobbing violins for not recognizing the trap as it hurtled toward us. The mea culpa began with flutelike truisms about supply and demand, but quickly brought the admission (kettledrums) that he had failed to consult John Hicks, a British economist who had tried to hammer John Maynard Keynes' "General Theory" into the "famous" (to economists) IS-LM model. DeLong stirred a blogospheric fuss. Paul Krugman, who has long prattled on about liquidity traps, scolded him not for missing Hicks but for apologizing. Apologies only give comfort to the enemy! Others, like Yves Smith at Naked Capitalism, murmured that Keynes had rejected IS-LM, as did Hicks himself before he died, in 1989, and even poked fun at DeLong's supply-and-demand lede. Thus ensued a spirited attempt (holding hands, rattling dishes) to commune with Keynes' unquiet ghost.

Meanwhile, the rest of the world was going mad. Perhaps this is what occurs in a liquidity trap, like space and time getting all rubbery in a black hole. Frank Rich in New York magazine complained that President Obama (a) was too cozy with Wall Street because (b) as a successful black man he favored white, rich, Harvard-educated elites, thus creating (c) a jobless recovery. Rich offered no policies to correct this except tossing miscreants into the liquidity trap, er, jail. In a separate conversation with New York editor in chief Adam Moss, Rich -- a white, liberal, Harvard-educated former drama critic -- admitted he was mostly upset at Obama because, with the economy flagging, he might lose in 2012. At the time, Obama was negotiating the debt ceiling with Republicans; last I checked, he still is. In a radio address, the president analogized the government to a family that needed to balance its budget. This agitated Krugman, of Princeton, who blogalistically then op-ededly excoriated Obama for adopting crackpot GOP metaphors that Keynes, for one, had rendered anachronistic. Krugman spent most of his wordage debating whether Obama (a) knew the truth but was playing politics, or (b) didn't and was listening to Clinton-tainted elites who didn't know a liquidity trap from the Holocaust. He settled on (b).

Actually, Krugman never used the phrase liquidity trap or the word Holocaust. That is my interpretation. So what have we got here? A failure to communicate, Mary Jane! No, it may be worse than that. We've got a variety of groups -- friends, enemies, former classmates, pointy-headed elites, angry mobs brandishing Huey Long speeches, plutocrats, underemployed bloggers -- occupying separate black holes, like air raid shelters from the '50s. Each of these embattled tribes -- Republicans, Democrats, Old Keynesians, New Keynesians, populists-meet-Tea-Partiers-down-by-the-riverside -- wields its own lingo, metaphors, morality, hurts, historical interpretations, neuroses; they spend their hours angrily pounding tin walls. Taxes. Revenues. Jobs. Inequality. Accountability. Liberty. A hundred variations on moron. Meanwhile, the president, who may or may not know his IS-LM from his mea culpa, attempts to speak above the roar. Not surprisingly, he does not begin with: Look folks, what we have here is a liquidity trap. ...

Perhaps he should, just for a laugh. What we have here is a failure of interpretation, which is a fancy way of saying we see the world differently. This may seem a prosaic thought. But what we have here is a political crisis born from an economic mess spawned by financial upheaval emerging from -- what? Most of this came as a surprise; DeLong gets credit for candor on the trap. Anyone who has ever dipped into Keynes knows economics can be paradoxical, counterintuitive (like liquidity traps, which I have yet to define), difficult. When DeLong gets sniped at over supply and demand, you know we're in trouble. Even worse, while the world seems to be wired by economists, and politics seems to hang on jobless rates, share prices and monetary magic, the great mass of souls have not a clue about the debates that rack the discipline. And even worse, the mob of opinion makers -- pundits, bloggers, filmmakers -- seems insulted that it has to defile itself with this sooty stuff. The very fact that the world operates this way makes them as angry as the table-pounding folks who believe they know. This, friends, is a much larger problem than liquidity traps.