According to new polls, the economy is the number one issue for American voters. A million homeowners may lose their homes because of the subprime mortgage crisis and millions more face difficulties getting credit. Energy costs are up, consumer confidence is down. We are poised for recession.

Washington is abuzz with plans to prevent the economy falling into recession. All the main presidential candidates are offering ideas for keeping the economy afloat. President George W. Bush wants to freeze mortgage rates while helping giant banks to unfreeze their credit by means of a giant bankruptcy process requiring so much government intervention as to make even a Democrat blush. Democrats are toying with middle-class tax cuts and increased spending on infrastructure to stimulate the economy. Pressure is mounting on the Federal Reserve to cut interest rates further. But none of these fixes will help much, because they do not deal with the underlying anxieties gripping American voters. The problem lies deeper than the current slowdown. It is only tangentially related to the business cycle.