This Gawker interview is the most accessible explanation of economic principles since Thurow and Heilbroner’s Economics Explained, and almost as funny.

So let’s pretend I don’t know anything about the stock market. Actually, there’s no need to pretend: I don’t know anything about the stock market. What the hell happened yesterday, and why should I care?

What happened is that a rumor got started that the Chinese government was going to clamp down on liquidity; i.e., the Chinese had too much money in the stock market, and were going to take measures to reign in speculation, investment, etc. So, for the first time…ever…the tail wagged the dog. Historically, the U.S. coughs and the rest of the world catches cold; yesterday, China hiccupped, and everyone had a heart palpitation…. [Y]esterday was a historic day.

Because of China?

Exactly. The Chinese own all of America’s debt. Plus, they don’t fight dumb wars, and have a good deal of cash on hand. It doesn’t establish a new paradigm, but it hints at one….

A butterfly flaps its wings in Beijing…

But durable orders in Chicago squash the butterfly.

Also, some computers made it worse.

[To the tune of U2, “New Year’s Day,” from the album “War”.]