It is a season of mounting hysteria at both ends of the political spectrum. The new administration invoked the specter of an irreversible economic cataclysm if its stimulus bill were not passed, while the right predicted, with equal fervor, a cosmic economic disaster if the bill did pass. The Treasury Secretary made a delayed announcement of a plan to "save" the struggling banking system, and the equity market dropped five percent. Pundits of every persuasion ritually repeat that this is "the worst economic crisis since the Great Depression."

I beg to differ.

Nothing in this little essay should be taken as an attempt to minimize the gravity of the current economic downturn, which is by any measure steep and significant. But there is a very human tendency, when we are overtaken by shocking events like this, to see them as being terminally unique.

Try to recall the psychology which gripped our country after the terrorist atrocities of September 11, 2001. It was cited as this generation’s Pearl Harbor. We were certain that this was World War III, that the next attacks might come in any form and were surely imminent, that the economy had been gravely wounded, that everything in our lives had changed, and that we would never feel safe again. Almost everything of which we were universally afraid that autumn, insofar as the homeland is concerned, quickly faded away. (Some might say too quickly.)

Granted, an exogenous disaster like 9/11 isn’t directly comparable to a great cyclical economic event such as the one through which we are passing now, nor am I presenting it as such. I cite it not for its fact pattern but for the psychology that it induced: the illusion of terminal uniqueness. When that illusion overcomes us—as it surely has now—we not only lose the ability to put events into any kind of historical context. We lose all useful contact with history itself.

I suggest we go back and look at the period 1979–1982. These were the climactic years of a decade and a half of stagflation: the deadly combination of low economic growth and high inflation, a confluence which, until it happened, many economists would have said was impossible. The fact is that, between 1966 and 1982, the Consumer Price Index tripled—it’s our nation’s only sustained period of hyperinflation—while the Dow Jones Industrial Average went from 1000 to…1000.

By the late 1970s, inflation was actually accelerating, unemployment and interest rates were rising, incomes were declining and poverty was increasing. Then, in 1979, the wheels really started to come off. The Iranian revolution led to a tripling of oil prices, while government price controls produced interminable lines at the pump. Because oil was then a much greater factor in the economy than it is now, consumer prices shot up. Organized labor (then 20% of the American workforce) staged crippling strikes, trying to keep wages abreast of prices; there were 235 major work stoppages in 1979, involving over a million workers. In August, Business Week magazine ran its famous "The Death of Equities" cover story.

By 1980, the "misery index"—the sum of the inflation and unemployment rates— was 22 percent. Gold in London hit $860 an ounce, a price it has never even remotely reached since, in real terms. (Today’s nominal price of around $1000 equates to perhaps 40% of what it was then, adjusting for inflation.). In September 1981, the yield on the benchmark 30-year Treasury bond exceeded 14.6%. Then, in 1982, unemployment peaked at 10.8%

I’ll leave the story of how this unprecedented, and therefore terminally unique, and therefore insoluble crisis was solved for another day. Suffice it to say that it was solved, as was every economic and financial crisis before it, and since.

Which brings us to the present day, about which one may, it seems to me, honorably hold one of two essential positions. The first is that this time is different: unprecedented, therefore terminally unique, therefore insoluble: the end of days. The other is that—fueled by massive monetary intervention, huge fiscal stimulus, and the natural order of the business cycle—we will muddle through, as we always have in the past.

In January of this year, new car sales were at such a low level that, were they to remain there, the average car would have to be on the road for 25 years before it’s replaced. In December, the rate of new single-family home construction was such that the average existing single-family home in America will have to wait 234 years to be replaced—as the economist Brian Wesbury pointed out, about the current age of Jefferson’s Monticello.

You may decide that it’s rather more likely that people are going to break down, at some point, and start buying new cars again, and that the automobile sales cycle will then turn up. By the same logic, you may deem it probable that people, taking advantage of today’s very low mortgage interest rates, will clear off the inventory of unsold homes, and that a new construction cycle will begin at some point. You may reluctantly conclude, in sum, that the business cycle has probably not been repealed.

In a similar vein, it may have escaped your notice that Intel recently announced plans to invest seven billion dollars over the next two years to build next-generation chip manufacturing plants right here in the USA, in order to produce faster, smaller chips that consume less energy. And how do they, in these credit-straitened times, propose to finance this massive outlay? Why, out of their own prodigious cash reserves, of course. (In January, Intel said it had more than $8.68 billion in cash, cash equivalents and short-term investments as of year-end.) The financial economy, dependent as it has become on the tender mercies of government, may be in a shambles. But out on the cutting edge of the technology economy, you’d think you were on a different planet.

(And don’t get me started on Moore’s Law, which says that the cost of a unit of computing power falls around 50% about every two years. If my math is holding up, that means that in ten years, computing power will cost a little more than three percent of what it does now. What astonishing new applications of information technology will such a decline in costs make manifest by 2019? )

But these musings are entirely beside the point. Which is simply a statement of one man’s opinion: that this isn’t quite the worst economic crisis since the Great Depression. It’s the worst economic crisis since 1980.

And that this crisis may one day be every bit as hard to remember as that crisis seems to be today.