I don’t know anything about economics, but I know what I like, and what I like is Naked Capitalism’s analysis of the Paulson plan. The long story short of NC’s analysis is that the financial system is, um, fucked up because housing prices became grossly inflated. Stability won’t return until housing prices fall to the level that people can actually afford to pay. Paulson’s plan would create an artificial floor, exactly what the Japanese did in the early nineties when their real estate prices collapsed, and exactly the strategy that has kept the Japanese economy in the cold freeze ever since.
Paul Krugman says pretty much the same thing from the left wing.
