Former Treasury Secretary Larry Summers' name is consistently placed prominently on the list of candidates to be President Obama's Treasury Secretary. This is rather striking since the policies he promoted as Treasury Secretary and in his subsequent writings led to the economic disaster that we now face.

As Treasury Secretary,...

President Obama won an enormous victory tonight, that will change the country. But this is just the beginning as he said in his victory speech.

President Obama has the opportunity to establish himself as one of the truly great presidents in his first days in office. He can take...

We all know how hard it is to get by on tens of millions of dollars a year. That is why the Washington Post was near hysterical in its support of the Wall Street bailout earlier this month. They argued that if we didn't give $700 billion to the banks...

In case you've missed the hype, IOUSA is a documentary making the case that the U.S. budget is hopelessly out of control and that our current spending patterns will bankrupt our children. The film features such noteworthy characters as Alan "Bubbles" Greenspan, Robert "Don't Regulate Credit Default Swaps" Rubin, and...

Okay, as we all know now that almost everything about Joe the Plumber is a lie. He doesn't own a plumbing business and apparently is not even licensed as a plumber, but he does raise a legitimate concern about "spreading the wealth around." The only problem is that in this...

Okay, we all should be glad that Treasury Secretary Henry Paulson seems to have abandoned, or at least sidelined, his TARP program and instead decided to directly inject capital into the banking system. The problem is under-capitalized banks and that is best solved by giving the banks more capital.

But,...

By John Schmitt and Dean Baker

In his 1980 presidential debate with Jimmy Carter, Ronald Reagan famously asked the American people whether they were better off than they had been four years ago. Enough voters answered "no" to give Reagan a decisive victory in the election.

Senator Obama is posing...

The Democratic leadership agreed to sign on to the bailout from the beginning, risking the wrath of much of the country, including many of their core supporters. Given this history and the severity of the crisis facing the economy, how about a little reciprocity?

This one is simple. Why shouldn't...

Just about every economist who supports bailing out the banks thinks that taking an equity stake through a direct infusion of capital is the way to go. While Secretary Paulson had pushed for his buying bad assets approach, he is now playing Hamlet and flirting with the idea of going...

The British government announced this morning that it is bailing out its banks by directly injecting capital through the purchase of preferred shares. It announced that the banks will suspend dividends and that top executives will get pay cuts.

This is what many economists advocated be done in...

According to the Washington Post, after the initial defeat of the bailout package in the House last Monday, Treasury Secretary Henry Paulson went to see President Bush in the White House. The Post reports that President Bush asked Paulson about "Plan B." According to the Washington Post, Paulson told...

Okay, let's hear from all those media commentators and politicians who screamed about the stock market plunge on Monday in response to Congress' rejection of the bailout. With the market closing lower today than it did on Monday should we assume that the bailout didn't work?

Should we be screaming...

If Congress passes the bailout it will be demonstrating an extraordinary belief in the power of redemption. In the past, I have noted the fact that Secretary Paulson's failure to recognize the housing bubble, and the economic and financial havoc that would be created by its inevitable collapse, contributed to...

The nation's political leadership has carried out a full court press for this bailout. They have frequently ignored the facts and commonsense (since when do we make policy based on stock market swings?) and repeatedly tossed out the specter of the Great Depression to push their case.

It's clear that...

The Federal Reserve Board chairman described the credit squeeze as being "as severe as any supply-induced constraint ever, other than from policy actions." That statement should help to prompt Congress into quick passage of the bank bailout bill, except this quote is from February of 1991, and the chairman...

That's easy. You ask them how failure to pass the bailout will give us a Great Depression.

The odds are that your favorite DC intellectual type has uttered some dire warning like that. After all, they all heard some authority like President Bush or a highly respected news reporter...

In spite of its best efforts, the Bush administration failed to push through a $700 billion give away to Wall Street. President Bush conjured up scary images of the Great Depression on national television. He even partially backed away from his initial demand for a complete blank check for Henry...

If you have a real story, you don't have to make up phony stories. That's pretty straightforward.

I've heard lots of phony stories. Much of the country's political and economic leadership has been running around raising the prospect of the Great Depression and a breakdown in the banking system (I...

According to the New York Times, Lloyd C. Blankfein, Goldman Sachs CEO, was in the room with Henry Paulson (former CEO of Goldman) when the decision to save AIG was made. Why does this matter? According to the New York Times, AIG owed Goldman $20 billion. If AIG had been...