Washington Post business columnist Steven Pearlstein was online Wednesday, April 23, at 11 a.m. ET to discuss the outlook for the economy and the markets.

Read today's column: The Bottom Is Up Ahead.

About Pearlstein: Steven Pearlstein writes about business and the economy for The Washington Post. His journalism career includes editing roles at The Post and Inc. magazine. He was founding publisher and editor of The Boston Observer, a monthly journal of liberal opinion. He got his start in journalism reporting for two New Hampshire newspapers -- the Concord Monitor and the Foster's Daily Democrat. Pearlstein has also worked as a television news reporter and a congressional staffer.

Pearlstein was honored with the Pulitzer Prize for commentary for his columns about mounting problems in the financial markets. His award was one of six Pulitzer Prizes won by The Washington Post this year.

Read Pearlstein's latest columns.

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Anonymous: Hi Steve, What do you think? Is the credit crisis over? The stock market certainly is behaving that way.

Steven Pearlstein: Your question, which is on the mind of many these days, is the reason I wrote this morning's column. The short answer is no. The longer version is in today's paper. This is a sucker rally in stocks.

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Submitting in Advance...: Thank you for writing your columns. I have to say that I agree with you. I don't know much about the stock markets, but I do know that as a consumer oriented nation, we are in big trouble. I am very troubled also that we have so much outstanding debt, especially that the current war on terror has been financed by foreign countries.

Do you suspect that there is more hidden about our national debt than we know about? I am speculating that the next administration that moves into the White Hourse will be alarmed about how things are structured. (I say this because this has not been an administration that cares about full disclosure, either for public or private institutions.)

With that said, where should we put our money now? Should we park it on the sidelines, and wait this out another 18 - 24 months? Would distressed real estate be a good investment?

Steven Pearlstein: Not a good idea for me to give much investing advice, so I'll duck that one, other than to point out that you don't want all your investments in dollar denominated assets. As for the national debt, I wouldn't worry so much about that as the amounts we are adding to it every year now, which will touch $700 billion in a year or two after you back out the Social Security surplus. That's way too much.

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Germantown, Md.: Even if you are right about the underlying cause of the credit crisis (macroeconomics), it seems that there was also a fair amount of sleaze/greed/incompetence involved. Is it possible that Wall Street's bad actions will serve to make the correction much, much worse (more painful and dramatic) than it otherwise would have been had it just been a macro imbalance and readjustment? Is there a synergy at play here that will multiply the problem? I thoroughly enjoy reading your columns. Thank you.

Steven Pearlstein: That's a good point you make, the interaction of the macro imbalances and the bad behavior and decisions by investors, lenders, regulators, investment banks and rating agencies. Obviously they interreacted. What I was trying to do was identified the "original sin," as it were, from which all the others followed, I think fairly predictably, considering the animal spirits that inhabit the markets. I'm not trying to excuse the sleeze and the bad judgment -- as I think you know from reading my columns. ButI am trying to put them in a broader environmental context. If you dangle candy in front of children, then some will take it and then the others will follow suit. Same with cheap money and Wall Street.

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Annapolis, Md.: One other thing about the CD renewal question: Do you advise "laddering" your CD due dates over several months to spread out different pots of money?

Steven Pearlstein: Sounds smart, doesn't it. But as with stock timing, don't be stupid about it. If at a particular moment the rates take a big dip because of some temporary factor, hold the money out and wait for things to return to normal. How do you know when that happens? Just use common sense.

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Washington DC: how worried should I be about food prices? or, conversely, how willing should I be start speculating in the commodities market?

Steven Pearlstein: There is a commodities bubble fueld by speculation right now. I'm afraid its probably too late to join it. It's too dangerous for most small investors.

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Annapolis, Md.: It's no secret that it's a depressing time for those seeing their retirement savings shrink. Of course, the advised best course of action is just to stay the course and stick with your long-term investment strategy. How about with CDs? Let's say you have one that's now coming due. If the best local interest rate is 3% APY, would you renew the CD for 6 months, 12 months, or somewhere in between?

Steven Pearlstein: Rates have got to go up at some point, to reflect the inflationary pressures, so don't lock in for too long at this point.

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Woodbridge, Va.: Steve, how much does your prognosis depend on the Federal Government becoming financially responsible? What with McCain now diving headfirst into fiscally promiscuous populism, no reason to believe that any of the candidates, once in office, will actually do anything about the deficit, other than talk about it. I'm actually somewhat inclined to believe we are facing a rerun of Jimmy Carter economics at the Federal level, with whiffs of long-term Peronismo in the air.

Steven Pearlstein: I didnt just fall off the turnip truck, so I hold out no great hope that the federal budget deficit will be tamed any time soon. I suspect it will take some sort of crisis to force the politicians to make these painful choices, and by definition a crisis is not really predictable. It will probably take the form of a dollar and interest rate crisis. Until then, the best we can hope for are some modest steps, and even those will be politically challenging: a social security fix (that's the easy one), ending the Iraq war, an increase in taxes on the wealthiest Americans, getting wealthy seniors to pay a bit more for their Medicare and some restraint on Medicare utilization, cutting back on some agricultural subsidies, a hike in the gasoline tax. How much of the gap will that solve? My guess is: not even half.

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McLean, Va.: Thanks for the great, honest column today. I think one of my biggest concerns about how long this economic recession will last is that we are still closer to the beginning of the wave of mortgage resets. Right now we are in the middle of subprime ARM resets but the majority of the option ARM resets (which I think could be more catastrophic) won't happen until the next few years. How much of an effect do you think these resets will have on the overall economy?

Steven Pearlstein: It will be a continuing wet blanket over the economy and the housing market. And its one reason this problem won't be fixed in two quarters.

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Potomac, Md.: Thanks for today's column. I am not at home in the financial field but enjoy learning from you. For me a comma is needed to avoid ambiguity after "deficits" in this sentence(D3): "It means that the federal government stops running huge operating deficits, by raising taxes..." Congrats on your Pulitzer award! Jim L.

Steven Pearlstein: Thanks, Jim.

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Winchester, Va.: Excellent article. How do foreign governments manipulate and peg currency to the dollar? This is never explained....one rare explanation is that China sells bonds to their citizens at a high rate in yuan, buy U.S. t's at low rates, lose money, but cost us jobs and keep trade positive for them. Please explain and elaborate

Steven Pearlstein: Okay, I'll try. When a county like China pegs its currency (its different for other countries that have open capital accounts, but I'll leave that aside), this is what happens. XYZ Toy company sells a million dollars of stuff to Toys R Us and gets paid in dollars, not yuan. It goes to its bank and deposits the dollars, which don't do it any good in China. It wants yuan, and exchanges the currency at the government dictated rate. The local bank, in turn, exchanges those dollars for yuan at the approved rate at the central bank of China. So what does the central bank do with the dollars. It could go into the world currency market and sell them, but to do so would, in the aggregate, force down the value of the dollar relative to the yuan. So it uses them, instead, to buy Treasury bills or Fannie Mae and Freddie Mac bonds. Okay, now ask yourself, where did the central bank get the yuan to buy up all those dollars. Well, that's easy. It printed them. And thus you get a problem back in China where the money supply is growing faster than the economy and causing inflation and speculative asset bubbles in real estate and stocks.

NOw why does China do this? it does it because it wants to keep the export machine -- and the export surplus -- going. Why? Because it is a way to provide employment for all those underemployed people in the countryside who are now streaming into urban industrial areas. And so it makes the calculation that it is better for the country overall to deny the exporters the full value of their products (through a higher exchange rate) in order to spread the wealth to more workers. In a country like ours, this wouldn't be a very good strategy. But in a rapidly developing country where there are lots of people who are underemployed, in an economic sense, it works very well.

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Toronto, Canada: Good morning, my American relatives are fairly pessimistic about the long-term prospects for the U.S., citing poor quality public education, health-care costs making larger employers less competitive in the global economy, the stifling of entrepreneurship due to health insurance concerns for small businesses, public corruption and the influence of special interests paralyzing the political process. Are they being too gloomy in your opinion?

Steven Pearlstein: In some aspects, yes, in others not. The failure to invest in public infrastructure and quality public services over the last 30 years is now having a real impact on growth potential, in my opinion, and in the short run that will mean raising taxes a bit even as we cut out less important forms of government spending. That's good for the long term, but not necessarily great for short-term growth. On entrepreneurship, I think we're still in pretty good shape, although that is not excusing our failrue to deal with health care, which I think we will deal with in the next five years. And as a general rule, I wouldn't discount the ability of the American political system and market-oriented economy to correct for its excesses and mistakes. We're not perfect at it, but we tend to be better than almost everyone else.

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Boston, Mass.: Not that I disagree with your assessment of the National Harbor shakedown, I just don't have any sense of how local government deals with these big projects. If developers take state money can they generally expect these complications? Are they common in other jurisdictions? Also why do states give these local liquor boards such power in the first place?

Steven Pearlstein: The liquor licensing setup in Maryland is truly strange and oorrupt. Essentially, the Senate delegation in each county controls the liquor boards, through the power to withhold confirmation of gubernatorial nominees. And from that you get all sorts of mischief. The broader political backdrop to that is that the liquor laws are very tight because Maryland was a dry state and still has this hangup about liquor.

As for the larger question of whether developers invite this sort of chicanery by taking subsidies, that's right. The subsidies at National Harbor were in the form of tax increment financing, which is to say that they divert some of the incrementally additional taxes generated by the project to pay for the project, so they aren't a drain of existing tax revenues. But it is a subsidy nonetheless and I think it is given out too freely. I'd rather governments say that they will take care of some infrastructure like sewer and water and highway interchanges, which are genuinely public functions, and avoid more explicit subsidies. But it is a judgment call: if you refuse to subsdize, will the project get done? The developers, of course, say no. But I"m not sure we've tested them on that sufficiently.

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Washington, DC: Mr. Pearlstein, I liked your column this morning. There is another factor to be considered in pondering how our economy became so overwhelmingly dependent on consumer spending. Back in the '60s, sociologist Daniel Bell wrote a brilliant book that predicted this very phenomenon, The Cultural Contradictions of Capitalism. In it, he offered the theory that the dynamic growth in the American economy over two centuries was due in no small part to the Puritan Ethic of deferring gratification and saving for the future. He predicted that the constant din of ads urging people to buy now was undermining that savings ethic and sowing the seeds for big problems, as people stopped saving and started spending more.

Steven Pearlstein: Daniel Bell was (is?) a wonderful sociologist and the analysis sounds right to me, with this caveat: the "puritan" ethic you describe was ressurected a bit by the Great Depression, which affected the spending and savings habits of lots of people who weren't motivated by some Calvanist religious tradition.

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Washington, D.C.: Thank you for your continued insights, and congratulations on your Pulitzer--it is well-deserved. Given the gloomy outlook for, well, just about everything, what would you suggest an individual do with funds available for investment with a 15 year horizon?

Steven Pearlstein: Be cautious for a year and then begin to put money back into stocks of well-run companies with good longterm prospects.

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Anonymous: Steve, You are the first to put in print what is really happening. Your assessment of the commercial real estate market is exactly right. The subprime commercial real estate loans have not matured yet and the current net operating income is sufficient to service debt at todays low interest rates but at maturity (which will begin to occur in 2009)there will not be enough equity in these deals to refinance. Thats when it hits the wall.

Steven Pearlstein: Thanks.

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Annandale, Va.: My first reaction to your column today was profound frustration and yes bitterness. Far too many ivory tower types have lectured the unwashed masses about "living beyond their means" and how we have to "take our medicine" knowing full well that the medicine won't have to be consumed by themselves. Life has blessed you richly Mr. Pearlstein and I don't begrudge you a single blessing, but understand that this member of the unwashed mass played by the rules yet is a victim of them all the same. I don't have credit card/student loan debt, I drive a 17-year-old car and lived with my parents for years until I was able to conservatively buy a house with a fixed rate mortgage. Meanwhile the screws are ratched down on all of us unwashed masses as employers demand increasing education for even entry level positions yet the price of education has far exceeded one's ability to pay for it or even finance it via loans. Health insurance chains you to a sweatshop white collar ghetto and you pray you don't drop dead in your cubicle before you can afford to retire. For once I'd like to see some recognition (granted you do a great job of poking at the oligarchs...) that the economic landscape left so many souls already struggling and hurting. The last straw will be more years of hard times to pay for the oligarchs excesses. It's not for nothing that the peak of Communism in America was during the 1930s. Roosevelt saved America from Fascism and Communism by realizing that you need to give the average Americans a better playing field.

Steven Pearlstein: I'm sorry you took the column that way. This is a problem in talking about macroeconomics. It is a matter of accounting that we, as a country, are living beyond our means. You can't argue with that. Does that mean that every household is living beyond its means? No. Does it mean that everyone has to accept a lower standard of living? No, it doesn't mean that, either. It's a collective thing. Now if some working class families are stretched to the max, it may be that they are living beyond their means. That could be because they paid too much for a house because of a housing bubble caused by the credit bubble. It could be because their income is lower than it shold be because so much of it is diverted to an inefficient and costly health care system. It could be because they are having to pay for private college tuitions that are going up faster than other costs because of a perverse competition in that industry, and the unwillingness of taxpayers to finance expansion of the state university systems. So it doesn't necessarily mean that households like yours are being profligate. You are trying to apply moralistic vocabulary to economics, which is descriptive, not judgmental.

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Baltimore, Md.: Steven: A question about spiraling oil and gas prices. When the oil company executives testified on the Hill a couple weeks back, they said that, essentially, they had little control over the price of gas at the pump because the price of crude drove that. My question is, are the record amounts of money all these firms are raking in reflected in an increase in profits, or is it merely an increase in revenues due to the higher price of oil. And if the money represents record profits, how can they claim to have no control over the price of gas at the pump? Incidentally, in addition to all the credit market problems you cited today, energy prices, and their effect on the price of everything else, will make the recovery, whenever it comes, dramatically slower than previous upticks from recession.

Steven Pearlstein: Big question, short answer. The oil companies don't control the price of crude, and right now that is the driving force in retail price increases for gasoline, natural gas, heating oil, jet fuel, etc. But they do benefit from the higher prices in lots of different ways -- because their markup is calculated as a percentage, and because they have upstream operations that have higher profits when the price of crude goes up. So they are free-riders on the OPEC cartel, which they don't control but which they cheer on from the sidelines.

Now you may ask, why doesn't competition force Exxon or Shell to lower its profit MARGINS as the price of crude goes up, so that it maintains the same return on equity or capital. The answer is that the markets it is involved in are imperfectly competitive. And it is here that the FTC and others have a blind spot. They can't prove it, even though, as a matter of economic theory, it must be true.

I'll repeat here what I've said many times before: If you are angry about rising energy prices, then raise the federal tax on energy. It won't significantly raise the price of energy. What it will do is reduce the profits of the oil companies and put downward pressure on the price of crude. I know it is counterintuitive, but its right there in the economics textbooks.

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Rockville, Md.: Thank you for taking my question. I have noticed your column today is mostly based on "common sense" arguments. Could you point out some facts that confirm your analysis? Please do not take this wrong. I like your column and, unfortunately, agree with most of it. I am simply trying to separate facts from opinions (even as qualified an opinion as yours). Thanks!

Steven Pearlstein: No, I really can't. It is logic and reason and theory, and a guy instinct after having lived through (and written through) a number of these incidents.

Ah, you say, but economics is supposed to be a science. Well, maybe, but I'm not an economist and I make no claims to science. That said, I would also point out that economics wasn't always so mathematical as it is today and it often involved anecdotal observation, logic and reasoning. Adam Smith and all that.

Frankly, there are no "facts" that are dispositive in this discussion. Because if you look at the economic models that the professionals use to make their forecasts, they are based on facts that are plugged into models that make all sorts of assumptions that aren't fact. And those assumptions often turn out to be wrong. So while there is a veneer of fact, in reality they are based on logic and reasoning and hunches, just like mine.

Of course, you could point out that big companies spend lots of money for other people's projections, whereas mine are pretty much given away for free. So if the market is correct, my advice is worthless.

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Danvers, Mass.:"But what if that isn't the whole story? What if, for the better part of a decade, the United States had been living way beyond its means, consuming more than it produced and investing more than it saved?" I wonder, too. I'm guessing you know of John Williams and his Shadow Government Statistics work, where inflation has been systematically under-counted, which implies real GDP growth has been less than stated, among other things. And then there's the observation that it seems since the only tool the Fed can bring to the problem here is money growth, we should expect that if your debt deflation scenario proves out, that the Fed will follow with a vigorous inflation to allow some debtors to pay back with cheaper dollars. I'm not sure. But I wonder how these two things fit in with your view. Thoughts?

Steven Pearlstein: Inflation may well be the primary way we reduce our standard of living.

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Laurel: So has inequality of income distribution reached its ultimate conclusion? Thirty years of near-zero real income growth outside the top 20% of earners has left 80% of the population with nothing to spend except their accumulated wealth from past years (i.e. their real estate holdings). Is there anyplace for the economy to go if we can't get more value out of the non-college educated?

Steven Pearlstein: The short answer to your question is: Probably yes. The political system is probably going to insist on a fairer distribution of income and wealth in some fashion. A Democratic victory in November would be a signal of that. Which, by the way, is likely and which would not be, on balance, good for the stock market. Another reason to question this rally.

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Atlanta, Ga.: I don't see why you can be so certain that we are experiencing a sucker rally. The stock market is a mechanism that discounts future earnings, so if company profits start going up late this year and next, then the stock market should be going up now.

Steven Pearlstein: Profits are not going to go up later this year. That's the problem. And the degree to which profits will decline has not been fully reflected in a market that has declined only 10 percent from its credit-bubble highs.

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Washington, D.C.: Hi Steven, First off, congratulations on the Pulitzer. Your commentary constantly edifies. Bravo! Now, on to the housing market...I'm having a hard time reading the tea leaves on housing because we're seeing high inflation while home prices are dropping. So, is it more likely that housing prices will continue to drop, or is it more likely that inflation will reduce the value of houses without actually affecting the dollar price? And would you guess that mortgage rates will return to much higher rates (over 15%) to make up for the inflationary issues? Thank you...and congrats again...

Steven Pearlstein: There are lots of changes in relative prices going on, none more important than the price of houses versus everything else. And that is a dynamic process. The price of everything else is going up while the price of houses in going down. And both are likely to continue for a while.

Mortgage rates at 15 percent? I doubt that. If it gets to that, we're in a lot more trouble than the scenario I laid out.

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Thoiry, France: What would be the consequence for the U.S. economy if the dollar loses its status as the worlds reserve currency and commodities started to be traded in Euros?

Steven Pearlstein: They wouldn't be traded in euro so much as in a basket of major currencies, including the dollar and the euro. And the consequences for the US economy would be this: it would lower our standard of living in the short term, but make the whole global system more stable in the long term, which would be good for everyone. We simply can't continue with a world financial system based on the currency of one country if that country doesn't remain in some sort of macroeconomic balance. It is a flaw in the current system.

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Princeton, N.J.: But Steve, surely a big part (25%?) of the price of crude oil is due to speculation. Supply and Demand doesn't fluctuate nearly as rapidly as the price of crude. Suppose the U.S. announced some big policy change (tax on gasoline, $100 Billion for research into alternatives, serious standards on car fuel economy), I bet you the price of crude would plummet immediately as speculators pulled out.

Steven Pearlstein: I agree, and if I were the president, I'd do that, and make it clear to the speculators that oil futures is not a one way bet and that you could lose your shirt if you're not careful.

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Seattle, Wash.: Great column, per usual. It's almost a given that there's a fundamental disconnect between Main and Wall Streets. How would you advise to fix this problem? Also, is the problem exacerbated by financial reporters typically being located in New York or focusing their coverage more on Wall Street than the real world?

Steven Pearlstein: That's a great question about the location of the financial reporters. Like political reporters who get coopted by living in the campaign bubble, too many financial reporters suffer the same fate by living in the Wall Street bubble. But not all. Look at Gretchen Morgenstern of the New York Times. Or her colleague Floyd Norris. But I agree, its a factor and leads to herd mentality among journalists that is parallel to the herd mentality among investors.

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Thoiry, France: We now know that people working for hedgefunds and investment banks are being paid astronomical amounts of money and that they sometimes produce handsome profits for investors. But we also know that their reckless behavior can destroy the entire financial system. My question is: Are they producing anything that is of value to society (outside of the investment class)? Has CDOs, CDSs and all the other new financial inventions produced anything of value to you and me?

Steven Pearlstein: There is an attitude that if you are producing something of value to investors, you ARE producing something of value for society, almost by definition. It is, basically, the Anglo-American attitude. But it is not the French attitude.

CDOs, CDSs are not inherently bad or stupid. Up to a point, in the right hands, for certain purposes, they are of value. And hedge funds and investment banks, when they are doing their jobs properly, do help to allocate capital in a way that enhances economic growth.

But the problem is that economic growth is not an end in and of itself. If all the growth goes to one person, to take an extreme example, then I don't care about economic growth, and I will use my political power to try to rebalance things. The trick is to rebalance it in a way that the benefits of redistribution outweigh the costs of foregone growth. France and the U.S. make different judgements about that. And we would probably both be better off if we moved a bit in each other's direction.

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College Park, Md.: Steve, I think your column today was right on as usual. It seems to me that the federal budget deficit is a major cause of this desire and ability for the U.S. to live above its means. Since there does not seem to be a major call for a balanced budget from the electorate I don't see a way to solve this problem. Is there some sort of market solution to this problem. For instance is there a way investors could reap long term profits and help bring the economy back into macroeconomic balance?

Steven Pearlstein: We are living through the market solution right now. Higher inflation, falling dollar, repricing of assets, slower growth, etc. The market is finally working. What is not working is the political marketplace, at least when it comes to federal budget policy.

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Washington, D.C.: For the Annapolitan asking about CDs: If I had liquid cash right now, I would put it in an online savings account with an FDIC insured institutions. The most prominent ones are paying a bit over 3% and you have complete liquidity.

Steven Pearlstein: Not bad advice, I would say.

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College Park, Md.: Your response to Annandale brings up an interesting point. Too much of our politics is discussed in moral terms. A prime example would be pollution. When people talk about SUVs being bad because they use too much gas, this is true but it is not a moral point. The people who have SUVs get the message that environmentalists think they are bad people because they drive SUVs and we can't have any meaningful solutions because people stop listening to each other.

Steven Pearlstein: Right. But what we could do is to acknowledge that SUV's cause problems not just for the owners of them, but for the rest of us, in terms of global warming, and that the cost of the SUV needs to reflect this externality, through a higher gas tax, for example, the revenue from which is used to mitigate or reduce global warming in some other way. Again, that's not a moral judgment, just a very sound economic judgment.

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Just a thanks for your columns...: I always look for them and your Wednesday chats to get a decent view of what is going on in the financial world in terms I can understand.

Steven Pearlstein: Thanks.

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Burke, Va.: I think it can all be blamed on overly high testosterone levels experienced by Wall St brokers.

Steven Pearlstein: Sort of the financial equivalent of street crime, most of which is committed by high testosterone young men.

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Locust Grove, Va.: Excellent column today. A small point: the second to last paragraph refers to "the real estate debacle of the 1990s and the tech bubble of 2000." Are those years correct or transposed?

Steven Pearlstein: No, there was a commercial real estate crash in the early 1990s. And the tech bubble burst in 2000.

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Re: Commodities Bubble: I've been reading other economists about the idea of a speculation-fueled bubble and they can't find evidence that it's speculation as opposed to just generally rising prices. Why do you say that it is speculation as opposed to rising energy prices and ethanol that is driving up commodity prices?

Steven Pearlstein: Because there is no way the basic fundamentals of supply and demand have changed so much in such a short time to justify price increases of this magnitude. Can I prove it? No. Again, this is hunch territory.

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Washington, D.C.: How long, do you think, the Fed can afford to keep interest rates low. If we have rates as low as Japan in the 90's, but have no savings to lend at those rates, won't there be a large flight of capital seeking higher rates. Does the Fed think it can print its way out of the problem, ala no M3 statistics any longer?

Steven Pearlstein: I'm sure the Fed doesn't think it can print its way out of the problem, which is why I think there aren't too many more rate cuts left in the Fed's bag of tricks.

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A Radical Idea: Just floating the idea here, but when you speak of solutions being required that are politically challenging, what I hear is, "There needs to be a disaster big enough to get both sides moving in the same direction." So, what would happen if the bond market were to downgrade, even just barely, to U.S. Bonds?

Steven Pearlstein: The bond market won't downgrade them in the technical sense of that word, by reducing them from AAA to AA. But it could effectively downgrade them by raising the relative interest rate of Federal debt. Right now, however, things are moving in the other direction because of a flight to "safety."

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Silver Spring, Md.: The "manipulation" of the yuan-dollar exchange rate by China to boost exports sounds like what Japan did with the Yen many years ago. How did that end and what does it teach us about what may happen with China? Ah, remember the good old days when the Japanese were buying America?

Steven Pearlstein: It is analogous. But the Chinese may be smart enough to avoid some of Japan's mistakes, particularly in terms of closing off the home market to foreign imports. And China is now allowing its currency to rise a bit faster to relieve some of the pressures that are building up. 7 percent in the last year. Not enough. But not nothing, either.

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Silver Spring, Md.: If you had asked me how I was doing financially in 2003, I'd say I was keeping my head above water since I just bought my first house after becoming a parent (at 40+). Now I am one of those bailing water out of my financial boat. My salary is the same as it was back then and my house is worth only a little more than I paid for it. We have another child and I'm in discussions to take money out of my 401k to pay off outstanding bills. AARP will soon be sending me a letter but the concept of retirement remains the abstraction that it was when I was 10. Like others and like my government, I made mistakes and now face a long slog to dig out. That said, I am thankful every day and know that many are worse off.

Steven Pearlstein: That's a sobering and thoughtful way to end this wonderful conversation today. Thanks to you all.

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