Continued.:It is also less than 1% of the market capitalization of U.S. stocks. In any typically volatile trading day U.S. stocks gain or lose $150 billion every hour. How often does one hear that?

"Surely that $150 billion will grow," you say. No doubt. Let's say the amount of bad paper doubles or triples. Would that finally bring the U.S. economy to its knees? I don't think so. The nearest historical comparison we have is the savings-and-loan crisis of 1986--95. On a constant dollar basis--so we can compare apples with apples--the S&L crisis saw $700 billion in bad loans. Nearly five times as much as we've seen in the subprime mess so far.

The S&L crisis caused some damage, to be sure. But during the 1986--95 period the U.S. economy grew and stocks went up. We survived stock shocks in 1987 and 1989 and a mild recession in 1990. The country did not collapse into a 1930s-like depression.

The financier George Soros calls today's credit crunch the worst global financial crisis since World War II. He's wrong. See the second reason for the explanation.

(second reason) Presidential election year. This is the most compelling presidential primary season in memory. By far the superior drama is the Democratic race … and it is going down to the wire. The press coverage is huge. Both Democratic candidates describe the U.S. economy as in terrible shape.

This year the out party, the Democrats, is giving us more drama, which gets more attention in the press.
You need a justification for change. Thus, their negative economic outlook gets more attention.