The recent economic news has been dismal, and it's now almost universally assumed things will get worse before they get better. Conventional wisdom also dictates that this recession will be longer, deeper and cause more long-term pain than any financial crisis since the Great Depression.

Yet, less than two years ago, conventional wisdom dictated that the housing bubble would be painful but that global economic growth would remain stable. That assertion was proved dramatically incorrect. Why then is there so much conviction...