How bad are things, according to Paul Krugman in the NYT?
"Normally sober people are sounding apocalyptic. On Thursday, the bond trader and blogger John Jansen declared that current conditions are 'the financial equivalent of the Reign of Terror during the French Revolution,' while Joel Prakken of Macroeconomic Advisers says that the economy seems to be on 'the edge of the abyss.'"
But the people in charge in Washington don't know what they're doing.
"The financial system has been under severe stress for more than a year, and there should have been carefully thought-out contingency plans ready to roll out in case the markets melted down. Obviously, there weren’t: the Paulson plan was clearly drawn up in haste and confusion. And Treasury officials have yet to offer any clear explanation of how the plan is supposed to work, probably because they themselves have no idea what they’re doing."
Recommendation, since not much is going to happen until this administration leaves office?
"One thing’s for sure: The next administration’s economic team had better be ready to hit the ground running, because from day one it will find itself dealing with the worst financial and economic crisis since the Great Depression."
Our job now is to elect that Administration. Do the debates give us any clue as to who may be better prepared? I think so.