Three things to think about

The blogosphere is often viewed as an alternative media source.  But in reality it should be seen as a complement to mainstream sources, not a substitute.  When it becomes a substitute people get confused over the different media.  Some of the comments make this mistake all the time when they confuse a serious paper that has passed through peer review and published in an academic journal with online discussions and postings.  These are radically different beasts.

It is also the case that mainstream media often has words of wisdome and arguments worth thinking about.  George Will last night said after the debate that McCain lost his chance by not fighting against the bailout two weeks ago.  I have argued the same thing since the VP debate.  And in today's Washington Post, David Ignatius states clearly that "We are all Chinese now. That is, we have a nominally capitalist economy, but we don't trust the freewheeling private market when it comes to the crunch.  So we turn to the government for protection and stability."  Ignatus is making a different point with these words than I would, but he is spot on.  Also in the Post, Peter Schiff tells the readers "Don't Blame Capitalism" and that while the crisis presents an opportunity of a lifetime for those who want to push for extensive regulation "to cage the destructive forces of capitalism" there are serious reasons to resist this push.  "Absent from such conclusions," he argues, "is the central role the government played in creating the crisis."

I can imagine historians, political scientists, and economists discussing these issues for a generation to come.  Lets home they get the story right.

Comments

[Steve Horwitz]

Think of it this way:

Every single thing we write about the current crisis should be written with an eye toward the historians of the future.

[Bogdan Enache]

Some people got a head start in this, I think - see for example below :

http://www.reuters.com/article/newsOne/idUSTRE49E5Q620081015?pageNumber=1&virtualBrandChannel=0

[Guilherme Stein]

What would happen if we let the banks fail? Don't you think that this would result in a massive decrease in the money supply? And if that suddenly happens, wouldn't a major depression hit our economies?

I think of my self as a libertarian, but since the State has the monopoly of the money supply, the State should supply it when people demand more money, and now it seems to me that banks are despered for more money...

[Mario Rizzo]

I think that careful analysis must make important distinctions: (1) the causes of the housing boom/bubble; (2) the role of the implicit guarantees of Fannie-Freddie; (3) the process by which mortgage-backed securities and credit-default obligations were created; (4) the problems that actors had/have in evaluating their worth; (5) the role of uncertain government policy during the panic stage in creating more uncertainty; (6) the role of Knightian radical uncertainty in #4,5; (7) the public choice aspects of the "recovery" plans and proposals; (8) the slippery slope potential in these plans and proposals; (9) the interpretative rhetoric of the situation and the lessons that people have and will learn from it; and (10) whether this is a case where some kind of government intervention was the lesser of evils once the cumulative decline got started (similar to Hayek's "secondary deflation" idea -- about which Larry White has written). These are paper and dissertation topics.

[Matěj Šuster]

Mario Rizzo:

That´s exactly my thoughts, too. :)

By the way, I highly recommend the following Calomiris´ analysis:
http://www.kc.frb.org/publicat/sympos/2008/Calomiris.10.02.08.pdf

[Rafe Champion]

What Mario said.
http://clubtroppo.com.au/2008/10/09/unpacking-the-sub-prime-train-wreck/
This is a centre-left blog which means is really much more left than centre, but a useful place to fly the flag so you are not preaching to the choir.

And for the cause of low home ownership among non-whites, check out the legacy of the Great Society programs of the 1970s.