Fiscal crisis: how much of a wake-up call?

The brief time between the fall of the Soviet Union and the events of 9/11 is sometimes called America's "vacation from history," since the latter served as an obvious reminder that we still live in a dangerous world.

With the Bush administration seeking a $700 billion bailout of the fiscal crisis, and with Democrats pushing their own package, the gravity of the current mess is clear. Much of the blame is put on how lending for the housing market got way out of hand. Treasury Secretary Henry Paulson and other talk about the need to restore a level of confidence to the markets. Fair enough.

But what about the fundamental underpinnings of the American economy?

Rhode Island prospered a long time ago, when the state was a manufacturing center. Yet America, for the most part, no longer makes stuff. Instead, the economy is heavily balanced on the finance-insurance-real estate sector, and for all the rhetoric about free markets, elected officials recognize the need to intervene lest the whole thing go down the tubes.

Thomas Friedman points to the renewable energy sector as a source of potential economic dynamism. Let's hope he's right, and that the current crisis brings adequate emphasis to more sustainable forms of economic development.