Volckerie

Even Paul Volcker seems to understand what a fine mess we're in. "Adam Smith more than 200 years ago advocated keeping banks small." he cautions in today's New York Times. "Then an individual failure would not be so destructive for the economy. That approach does not really seem feasible in today’s world, not given the size of businesses, the substantial investment required in technology and the national and international reach required. Instead, governments have long provided commercial banks with the public 'safety net.' The implied moral hazard has been balanced by close regulation and supervision." Obviously we need to back off Reaganomics now and get back to the real deal. Read Volcker's full opinion here.

Freezing

"They're worthwhile but they pale relative to the size and scale of the challenge America's middle class is now facing," says Robert Reich about Obama's new plans for a three-year spending freeze and then more jobs for the middle class (easier said than done). "Obama can no longer afford to come up with lists of nice things to do," Reich continues. "At the least, he's got to do two very big and important things: (1) Enact a second stimulus. It should mainly focus on bailing out state and local governments that are now cutting services and raising taxes, and squeezing the middle class. This would be the best way to reinvigorate the economy quickly. (2) Help distressed homeowners by allowing them to include their mortgage debt in personal bankruptcy -- which will give them far more bargaining leverage with morgage lenders. (Wall Street hates this.)"

Hello?

Anybody there? What's going on? Robert Reich tries to figure it out on Wall Street, while Ruth Marcus wonders what the Supreme Court was smoking when they decided to let corporations and special interest groups virtually buy elections. It's not a pretty sight.