Last week's economic report couldn't have been much rosier. The economy grew at a faster-than-expected rate, faster than any time in over a year. But far from sparking runaway prices, inflation actually moderated.

But that didn't stop the Axis of Gloom, AKA the New York Times and its Beantown subsidiary the Boston Globe from publishing op-ed items this morning finding the cloud on the silver lining. A lugubrious Times editorial laments:

By the end of last week, any lingering hope that the housing downturn would be contained had vanished. As this week begins, signs of contagion seem to be everywhere . . . The fallout of housing-related turmoil is also likely to extend beyond financial markets.

The editorial ends with a call for closer monitoring of hedge funds.

Over at the Globe, liberal economist Robert Kuttner [pictured here] emits a sky-is-falling column "The crash that could come."

HISTORICALLY, October has been the month for big financial busts. But this year, October could come early.

Kuttner envisions this worst-of-all-worlds scenario:

Investors and ordinary citizens have good reason to worry about a perfect economic storm: a deepening loss of confidence in the dollar leading to higher interest rates; the higher rates bringing a crashing end to a hedge-fund, private equity, and merger binge that has depended heavily on cheap borrowed money; the boom in bait-and-switch mortgages ending in a morning-after of rising defaults and sinking housing values; inflationary pressures in food, oil, and other commodities leading to still higher interest rates -- all unsettling stock and credit markets and putting a new squeeze on consumers borrowed to the hilt.

Echoing the Times, Kuttner also closes with a shot at those evil hedge funds and a dollop of class envy:

When historians sort out what could well be the recession of 2007-08, they will wonder why regulators did not act before the speculative binge in hedge funds, private equity, derivatives, and subprime mortgages pushed the larger economy into a general downward spiral. As always, the details will be complex, but the basic reason is pretty simple -- too many well-connected insiders were making too much easy money.

Nothing infuriates a liberal like the thought of someone, somewhere, making a lot of money.

I wonder if the Times or Kuttner penned similar jeremiads prior to the internet-bubble stock market crash that actually did occur: during the Clinton administration?

Contact Mark at mark@gunhill.net

—Mark Finkelstein is a NewsBusters contributing editor and host of Right Angle. Contact him at mark@gunhill.net.