But if really good information on local lending, say, actually trickled up to the Board of Governors’ staff from branches like San Francisco or Atlanta in the early 00s, say, then surely the housing bubbles in those regions (Atlanta branch serves Florida) would not have been such a surprise.

Very good and apt essay, EW. One thing about this insistence upon lurching from crisis to crisis in the economy is that the need to attend to a number of problems that are real, but probably solvable or ameliorable, is forever obscured. The current turn might be the one where those who think they are clever for being able to gin up and then ride out these essentially phony storms learn how steep a markdown their pelf takes when it doesn’t have a society to go along with it.

As for scope, well, the whole point of Fed worship is that monetary policies supposedly don’t involve taxing and spending decisions or anything else that, under our constitution at any rate, forces one to have to act like a member of a polity. Like I said last paragraph …

The current value of some of these homes will be less than the amount owed – the mortgage is underwater. What gives? do we taxpayers loan enough to pay off the existing mortgage in full, even though the house isn’t worth the amount loaned? IF so then the bank is making a profit off a poor business decision (speculating that house prices won’t decrease).

probably this already was pointed out to you, I got here late.

Lets get our butts in gear netroots and hammer out a plan and go viral with it.

Here are my novel ideas:
1) ration gasoline to 90% of current consumption (it is forced savings and demand would drop, lessening our trade deficit)
2) forgive 15% of all outstanding home loans and payment reduction with a government owned call at 7% interest for recapture of price appreciation.
3) use that money to fund a bailout at a dollar for dollar participation.

The solution has to be simple enough for everyone to understand and everyone then has the option to participate of not. Obama likes “the Nudge theory” so he should embrace it.

If we need to do Shumer’s $150B bailout in the meantime while this gets put in place, great. That is the cost of buying time.

But, damn it, those poor captains and colonels and general of finance will not get rich as quickly as their dreams had promised.

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Republicans cannot advocate taking a wider look at the economy. It would render meaningless their catechism that that isn’t something Gubmint is supposed to do, much less be good at. It shouldn’t record or analyze what it sees, or provide data for others to do so, because then it might decide it has the right, the power, the duty to do something about its abuses and excesses.

Republican Gubmint’s job is to direct public wealth to private business. It is not to promote the general welfare, not to direct taxpayer funds to those who paid them, not to ”reward” those who don’t vote Republican, or, frankly, even most Republicans.

Look at the wider economy? Cheney’s Bush has been working hard for nearly a decade to prevent government from doing that. It’s succeeded. We’ve had precious few discussions about the economy, about privatizing and outsourcing, about jobs exporting and corporation-subsidizing, about shutting down public-protecting regulators and rewriting regulations to sanction giveaways to the private sector. Look at the wider economy? You must be joking.