A year ago, as the outlines of the current financial crisis were just becoming clear, I suggested that this crisis, unlike a superficially similar crisis in 1998, wouldn't end quickly.

    It hasn't.

    The good news, I guess, is that we've been experiencing a sort of slow-motion meltdown, lacking in dramatic Black Fridays and such. The gradual way the crisis has unfolded has led to an angels-on-the-head-of-a-pin debate among economists about whether what we're suffering really deserves to be called a recession.

    Yet even a slo-mo crisis can do a lot of damage if it goes on for a year and counting.

    Home prices are down about 16 percent over the past year, and show no sign of stabilizing. The pain from this bust is widely spread: there are millions of American families who didn't buy mortgage-backed securities and haven't lost their houses, but have nonetheless been impoverished by the destruction of much or all of their home equity.

    Meanwhile, the job market has deteriorated even more than you'd guess from the jump in the headline unemployment rate. The broadest measure of unemployment, which takes into account the rapidly rising number of workers forced to take cuts in paid hours and wages, has risen from 8.3 percent to 10.3 percent over the past year, roughly matching its high point five years ago.

    And there's no end to the pain in sight.

    Ben Bernanke and his colleagues at the Federal Reserve have cut the interest rates they control repeatedly since last September. But they haven't managed to reduce borrowing costs for the private sector. Mortgage rates are about the same as they were last summer, and the interest rates many corporations have to pay have actually gone up. So Fed policy hasn't done anything to encourage private investment.

    The problem is fear: private-sector finance has dried up because investors, burned by their losses on securities that were supposed to be safe, are now reluctant to buy anything that isn't guaranteed by the U.S. government. And the proliferation of special rescue packages - the TAF, the TSLF, the Bear Stearns deal, the Fannie-Freddie thing - may have staved off blind panic, but has fallen far short of restoring confidence.

    Oh, and those tax rebates Congress and the White House agreed to mail out have already done whatever good they're going to do. Looking forward, it's hard to see how consumers can keep spending even at their current rate - which means that things will probably get considerably worse before they get better.

    What more can policy do? The Fed has pretty much used up its ammunition: nobody thinks that additional interest-rate cuts would accomplish much (and there's a faction at the Fed that wants to raise rates to fight inflation).

    And nothing much can or should be done to support home prices, which are still much too high in inflation-adjusted terms. Nor can Washington prevent a continuing credit crunch: overextended, undercapitalized financial institutions have to rein in their lending, and it's not realistic to expect the public sector to pick up all the slack - especially when quasipublic institutions like Fannie and Freddie are also in trouble.

    There is, however, a case for another, more serious fiscal stimulus package, as a way to sustain employment while the markets work off the aftereffects of the housing bubble. The "emergency economic plan" Barack Obama announced last week is a move in the right direction, although I wish it had been bigger and bolder.

    Still, Mr. Obama is offering more than John McCain, whose economic policy mainly amounts to "stay the course."

    Incidentally, it's surprising that the lousy economy hasn't yet had more impact on the campaign. Mr. McCain essentially proposes continuing the policies of a president whose approval rating on economics is only 20 percent. So why isn't Mr. Obama further ahead in the polls?

    One answer may be that Mr. Obama, perhaps inhibited by his desire to transcend partisanship (and avoid praising the last Democratic president?), has been surprisingly diffident about attacking the Bush economic record. An illustration: if you go to the official Obama Web site and click on the economic issues page, what you see first isn't a call for change - what you see is a long quote from the candidate extolling the wonders of the free market, which could just as easily have come from a speech by President Bush.

    Anyway, back to the economy. I titled that column about the early stages of the financial crisis "Very Scary Things." A year later, with the crisis still rolling, it's clear that I was right to be afraid.

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