Tyler Cowen: "I'd like to stress again that I remain worried about the rule of law in all these events. First, the referee is on the playing field. Second, while Dodd and others are on board, basically we have the executive branch of our government -- the Treasury -- operating without formal checks and balances. (Does that sound familiar? Would this administration do that?) That's why it is all being done through the Fed. Fortunately the Fed is also a competent technocracy (as is the current Treasury) but the broader implications here are very worrying, both for governance and for the future of the Fed itself."
Jonathan Golob thinks we ordinary Joes just mightweather the crisis: "Thanks to Bushinomics, a breathtaking amount of global wealth was concentrated in the hands of a teeny few-the collection of petty dictators sitting on sovereign funds, monopolists and oil barons sitting on multibillions.
"Want numbers? WaMu is the country's largest savings and loan, with about 40 million depositors and about $150 billion in retail deposits. Our entire, collective, plebeian, life savings are chickenshit the scale of the losses of these diversified financial monstrosities managing the money of the wealthy few. We're so far down on the wealth chain, that our meager earnings barely dent the vast sloshing of wealth battering the top.
"Regular people might end lucky in all this. The housing bubble, at least, produced a whole bunch of new homes for people to live in. Food still is incredibly cheap by historical standards-and about to get cheaper again as oil prices come down, and commodities speculation dwindles down. The astonishing reality of our present is, trillions of dollars in wealth can be totally evaporated, and the overwhelming majority of us will still be fed and live indoors. Hopefully."
Reserve Primary Fund becomes the first money-market fund to "expose investors to losses." Money market funds are typically thought to be "safe" investments.
Friedman advocates for the restoration of the Resolution Trust Corporation: "In sum, government's job is to police that fine line between the necessary risk-taking that drives an innovation economy and crazy gambling with other people's savings in ways that threaten us all. We need to make sure that what happens in Vegas stays in Vegas - and doesn't come to Main Street. We need to get back to investing in our future and not just betting on it."
Consider: "If George W. Bush's/John McCain's views on Social Security of a couple of years ago had been national policy, your retirement could have shared in this meltdown. What's in your 401K/IRAs?"
Krugman on Phil Gramm
"...everybody knows that if McCain becomes President, Phil Gramm is the odds-on favorite to be the Treasury Secretary."
"What would that do to the American economy, do you think?"
"Oh, boy, well....Ben Bernanke and I think Hank Paulson understand that we could manage to have another Great Depression if work at it hard enough; I think Phil Gramm might just be the guy to do it..."