Robert Higgs, my favorite crisis prophet, has wisdom for the self-styled free-market economists who freaked out during the past few months:

Back in my
days as a professor, I always endeavored early in the course to
teach my students the fundamental importance not only of the first
laws of demand and supply, but also of the second laws of demand
and supply. Thus, the first law of supply states that the greater
the price, the greater is the quantity supplied per unit of time,
other things being equal. And the second law of supply states that
the own-price elasticity of supply is greater, the greater is the
time allowed for response to a change in price. The first and second
laws of demand are expressed similarly…
Thus, although we can expect markets to respond to price changes,
we must recognize that the responses take time; and the greater
the time, the greater are the responses. Anyone who expects markets
to restore a disturbed equilibrium instantaneously will be disappointed.
People cannot discover the relevant changes, confirm and assess
them, consider alternative arrangements of their affairs, and carry
out those changes in an instant. The competent economist appreciates
the necessity of patience in evaluating the market’s operation.
Simply because the market does not appear to have reconfigured itself
fully soon after a shock, we have no warrant to conclude that “the
market doesn’t work anymore” or that “the market doesn’t
work the way it used to.”

He adds:

Decent analysts
know these things; I am not breaking new ground here. So, we can
only shake our heads in wonder when we see well-known free-market
economists and other formerly sound analysts and commentators embracing
unsound and ill-considered positions. Among other things, we must
appreciate that the sky is not falling, even if the news
media and the politicians talk and act as if it is.

I still can’t believe it was FDR, not Higgs, who said “There is nothing to fear but fear itself.”