A few links to why/how/what should we do about the financial situation.
George Wil via Washington Post:
The essence of this crisis is lack of knowledge, including the inability to know who owes what to whom, and where risk resides. In such a moment, government’s speed should not vary inversely with its information. With government’s prestige, measured by approval ratings of the president and Congress, at a historic low, government is taking on unprecedented responsibilities. Henry Paulson, a.k.a. the Fourth Branch of Government, is intelligent and indefatigable and has as much pertinent experience as could be hoped for. But no one has ever had much experience that is pertinent to the tasks that would be assigned to him by the three-page legislation that would give him almost complete discretion over at least $700 billion
I am afraid that policymakers today have not learned the lesson that prices must adjust to economic reality. The bailout of Fannie and Freddie, the purchase of AIG, and the latest multi-hundred billion dollar Treasury scheme all have one thing in common: They seek to prevent the liquidation of bad debt and worthless assets at market prices, and instead try to prop up those markets and keep those assets trading at prices far in excess of what any buyer would be willing to pay.
Fox News on Freddie and Fannie:
More here:
