Today’s surprise was a big earnings miss and write-down at General Electric, which is disturbing because it indicates the slowdown spreading beyond finance and housing (although GE is an immense financial enterprise). The same contagion showed in the newest small-business index (the National Federation of Independent Business), which was down in March to the lowest reading since the second quarter of 1980. In the 28-year interval, unlike measures of consumer confidence, the NFIB has never recorded a false negative: every index downturn has coincided with recession.

Yet, the crucial indicator for the economy — jobs — has yet to break hard. Last week’s spike in new claims for unemployment insurance completely reversed this week.

The race is still on: will we get an effective public-policy response to the credit crunch before the economy fails, or after? Incredibly, now eight months into this, we are still very much alive — rattled and angry with one another, but alive. There is still time.

Alan Greenspan, 82, republican, was once regarded as the finest central banker of all time. Unlike any predecessor, since his retirement he has frequently offered economic and market commentary. While his commentary has not been particularly harmful, it also hasn’t been enlightening, either, and has served to undercut the authority of his successor.

Since the onset of the crunch, Greenspan has been consumed by an effort to defend his record, insisting that markets should be allowed to work unhindered, and regulators should not intercede in excess. This week he said that he did “not regret a single decision” as Chairman.

Although most of the criticism hurled at Greenspan is either mistaken or debatable (especially that he kept the Fed’s cost of money too low for too long from 2002-2004), his term marked the most colossal regulatory failure in American history, the failure to intercept the credit bubble.

Paul Volcker, 80, democrat, Federal Reserve Chairman from 1979-1987, six feet six inches tall, chewing a stogie always, brutal inflation-fighter, personal creator of the worst recession since the Depression (11 percent unemployment, 22 percent prime), no published memoir, no lucrative speaking tour, rose this week to criticize current Fed Chief Ben Bernanke. Volcker finds the Bear Stearns intervention a bad precedent, and feels the same for emergency financing of Wall Street dealers. Once revered for his courage, he revealed his inner one-track: punishment is good.

Great work, guys.

President Bush returned from Europe to focus on Iraq.

Congress is hard at work to keep people in houses that they cannot afford.

Bernanke has dark circles under his eyes, and seems to have lost weight.

Treasury Secretary Henry Paulson found the notes he misplaced last month. Too bad. “Those institutions that need capital should raise it.” One did: WaMu found some old Texas Savings & Loan sharpies who dumped $7 billion into the wreck, structured a deal that pretended not to control the institution, doubled the shares of stock outstanding (stockholders who had already lost 75 percent of value were “diluted” into loss of half of the remainder), and shut down all of WaMu’s mortgage offices and wholesale lending, firing 3,000 very able mortgage personnel in favor of yappers at a “call center.”

WaMu is in mothballs, embalmed until the sharpies find the moment to sell the branches and their deposits. “Capital raising” in the marketplace has permanently extinguished yet another source of credit.