"The stimulus bill has attracted the bulk of the commentary because I think most people feel more competent to talk about those issues," writes Matt Yglesias. "But I think the banking system issue is ultimately more important and more fundamental." That's probably correct. And given the unbearable vagueness of the Geithner plan* -- and the stock market's violently negative reaction -- we'll probably see substantial changes in the shape of the federal response before the crisis is through. Which is another way of saying that there's still room for commentary and activism and public attention to make a difference. And, like Matt, I'd like to see more people listen to the Financial Times' Martin Wolf.Indeed, it sure seems to me that a lot of the people who predicted this crisis -- or something much like it -- are arguing for aggressive solutions like temporary nationalization while a lot of the people who didn't predict this crisis -- who, say, opposed the regulation of derivatives and who let Lehman fail -- are arguing for somewhat more tepid measures. Prescience in identifying the problem doesn't necessarily predict prescience in solving it, but I wouldn't rule out the possibility of a correlation. And I would like to hear the administration argue against temporary nationalization on the merits rather than simply dismiss it as a possibility (and possibly resurrect it eight months down the line if the initial efforts don't work). *Tim Geithner is taking a lot of flack for today's plan, and after this morning New York Times article laying its development in his lap, he'll also take the fall if it proves insufficient. But given everything we know about Larry Summers' role in economic policy making, it's very hard to believe that this plan went out the door with Summers warning that it was ill-conceived and vague and sure to send the market cowering. The weird thing about Summers' role right now is everyone I speak to in the administration agrees that he's the real power on domestic policy making (focusing on the economy, but with hands in health, energy, and much else) but hes fundamentally not accountable because his position as an adviser makes it very hard to see what is and isn't emerging out of his office. THE BANKS ARE NOT ALRIGHT.
"The stimulus bill has attracted the bulk of the commentary because I think most people feel more competent to talk about those issues," writes Matt Yglesias. "But I think the banking system issue is ultimately more important and more fundamental." That's probably correct. And given the unbearable vagueness of the Geithner plan* -- and the stock market's violently negative reaction -- we'll probably see substantial changes in the shape of the federal response before the crisis is through. Which is another way of saying that there's still room for commentary and activism and public attention to make a difference. And, like Matt, I'd like to see more people listen to the Financial Times' Martin Wolf.Indeed, it sure seems to me that a lot of the people who predicted this crisis -- or something much like it -- are arguing for aggressive solutions like temporary nationalization while a lot of the people who didn't predict this crisis -- who, say, opposed the regulation of derivatives and who let Lehman fail -- are arguing for somewhat more tepid measures. Prescience in identifying the problem doesn't necessarily predict prescience in solving it, but I wouldn't rule out the possibility of a correlation. And I would like to hear the administration argue against temporary nationalization on the merits rather than simply dismiss it as a possibility (and possibly resurrect it eight months down the line if the initial efforts don't work). *Tim Geithner is taking a lot of flack for today's plan, and after this morning New York Times article laying its development in his lap, he'll also take the fall if it proves insufficient. But given everything we know about Larry Summers' role in economic policy making, it's very hard to believe that this plan went out the door with Summers warning that it was ill-conceived and vague and sure to send the market cowering. The weird thing about Summers' role right now is everyone I speak to in the administration agrees that he's the real power on domestic policy making (focusing on the economy, but with hands in health, energy, and much else) but hes fundamentally not accountable because his position as an adviser makes it very hard to see what is and isn't emerging out of his office. 
