From someecards.com:

Great Depression II

Economist Ken Rogoff predicts that the Fed could soon cut interest rates to 0%.  Hmm.  Do we want to be Japan?

Everything you might have missed (or want to relive) between the first and last debates:

California may soon need a $7 billion loan from the federal government because of the credit crunch.

And another Lewis column, from March, forseeing the current crisis as the inevitable result of a free-for-all on Wall Street.  The punchline:

Ever since then, when extremely smart people have found extremely complicated ways to make huge sums of money, the typical Wall Street boss has seldom bothered to fully understand the matter, to challenge and question and argue.

This isn’t because Wall Street CEOs are lazy, or stupid. It’s because they are trapped. The Wall Street CEO can’t interfere with the new new thing on Wall Street because the new new thing is the profit center, and the people who create it are mobile.

Anything he does to slow them down increases the risk that his most lucrative employees will quit and join another big firm, or start their own hedge fund. He isn’t a boss in the conventional sense. He’s a hostage of his cleverest employees.

At this point you have to at least wonder if Wall Street firms should be public companies. Their complexity renders them inherently opaque. Investors are right now waking up to this fact: They will demand to be paid for opacity, and also for volatility.

The firms have been revealed to be so treacherous in bad times that the only way they survive as public companies is to make outrageously huge sums in good times. That is, as public companies, to be economically viable they are likely to be socially problematic.

If they aren’t about to go under, they are making so much money that everyone else hates them.

Something is about to give.

A snide Michael Lewis column on how to save Goldman Sachs (from a week or so ago, but still funny).

An interesting dispatch by Karen Tumulty on what Warren Buffett thinks about the big players in this economic crisis and bailout.

Buffett is convinced this bailout is going to turn out to be a terrific deal for the federal government, assuming it buys these distressed assets at market prices, and quipped, “I would take 1% of the Treasury’s action.” (In fact, one proposal he made was to have private investors join in as partners in some of these deals, taking their cut only after the feds recoup the taxpayer investment.)

He had high praise for Treasury Secretary Hank Paulson, and urged whoever gets elected in November to keep him on into the next Administration. Buffett also said one of the unsung heroes of this crisis–which he described as “an economic Pearl Harbor”–has been FDIC Chairwoman Sheila Bair, who has managed to hold the banking system together in recent weeks by helping to engineer a series of takeovers. “In my book, she stands higher than any CEO in America today,” Buffett said.

And another jab at the govenment’s low expectations of rich people like him:

And Buffett had his usual wry commentary on the tax system, noting that he is now paying a lower rate than he ever has, including back when he delivered newspapers, and that it is lower than the tax rate paid by the cleaning lady in his office. “The government looks at me, and says, ‘You’re like the condor and the spotted owl. We have to protect you,’ ” Buffett said. And he noted that he is getting this bonanza without the use of any tax shelters, or even a tax planner. But then he quickly corrected himself: “I guess I do have a tax planner. His name is President Bush.”

Paul Krugman’s latest take on the bailout proposals:

My view, which I think is now shared by many economists, is that Paulson grabbed hold of the wrong end of the stick — he should have been seeking to expand bank capital, taking an ownership share in compensation, rather than trying to push up the value of toxic paper. In the end, that’s what we’ll probably do.

On the other hand, the way that Paulson et al have been blundering around puts the lie, I think, to the idea that this is a cynical ploy. Ideology certainly played a role — it’s probably a lingering distaste for Evil Socialism that made Treasury go for buying toxic waste rather than injecting capital. And if the Bush years have taught us anything, it is that sometimes conspiracy theories are right. But in this case the performance has been more Keystone Kops than Star Chamber.

So now what? Like Jamie Galbraith, I’d rather see Dodd-Frank-Paulson, which is much better than the original plan, pass than not. The true cost to taxpayers will probably be close to zero, and it would buy some time. But I’m not passionate about this. The real financial rescue still lies in the future, probably under the Obama administration.

TPM rounds up economists’ opinions on the financial crisis and proposed bailout bills.  No one seems impressed, and a few note that the best use of the government’s money right now would be a stimulus package.  Spend the money on health care restructuring or buliding new schools or just put the money directly into the hands of the unemployed, who would spend most or all of it.  Find a way to help people pay those mortgages that everyone’s so worried they’ll default on.  Protecting banks from admitting that a large portion of their assets are, in fact, worthless seems like a band-aid to me.  It ignores the microeconomic causes of this crisis: Families cannot make ends meet, and bankers pretended this situation wasn’t inevitable for far too long.