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Economic anxiety can produce dire economic consequences by increasing the demand for trade protection, for restrictions on immigration, for union protections, for other anticompetitive measures, and for government subsidies; it can also create class resentment, and thus lead to inefficient regulatory policies, as we may be seeing with proposals to "rein in" the "greedy" banks. One reason I continue to believe that what we have gone through in the last two years is a depression and not a mere recession is that it has raised economic anxiety to a politically dangerous peak. I regard the "tea party" movement as rooted in a widespread sense (not limited to those who identify with the movement) that something is seriously wrong with the country..
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