Hi everyone! Welcome to Day 2 of "James Call: Expert". Please bear in mind, for those of you joining us for the first time, I'm not an "expert" in anything. I just drink a lot of coffee and check politico.com every 13 seconds. I've read a lot of financial books, too. But basically I'm just a cranky file clerk. Thankfully with a job! Those are gonna be even more scarce pretty soon.
Anyways, we got two great questions yesterday, which I'm going to roll into one "super-question" since they are quite related. But first, I'd like to touch on the "how to get Al Qaida in Pakistan and Afghanistan" question from yesterday.
I had suggested we should pay some informants off to locate Osama et al, but in light of something I read in The Shock Doctrine by Naomi Klein (amazing book - a bit emotional at times - a quick read and a real mind-opener - everyone should read it), I think I may rescind my comments. Since we've been paying people thousands of dollars for Al Qaida operatives for a few years now, and they just keep kidnapping peasants etc. and shipping them off to us, and since we don't have anyone who speaks the local languages over there or know what the fuck we're doing, we keep giving slimebags money to sell us innocent people, who end up in Guatanamo or Bagram - hundreds of them - people with no info whatsoever.
So I guess that leaves the only "solution" as "really occupy the country and Marshall Plan that shit". Which, for the record, would have justified the Iraq invasion in my opinion: If we had left it a richer, better, more secure country than we found it. Which we didn't - instead we totally ruined the joint. And since we're undergoing this financial crisis and the political willpower for years of war no longer exists, I don't think success in an option in Afghanistan. Instead, I think we're going to lose both wars and thank God oil is slowly losing it's importance, because we just need to get the fuck out of the whole region for at least 2 or 3 decades.
Anyways, on to today's questions:
"Greg" asks: "Please explain the recent sequence of events that caused the current
economic crisis that is veering towards National Socialism."
and "My Mom" asks: "what is your opinion about McCain's tactics re:
canceling the Presidential debate Friday night, with his "country first"
excuse? Is it brilliant (though terrifying) politics or is the death of
Well! I'm writing this first bit at 7am, one hour before I get my NY Times for the day, and the information contained within that will be outdated within a number of hours, anyways. But... I can begin answering these two linked questions. GO TEAM!
Let's answer my mom's question first, as it is MUCH easier to answer:
The McCain gambit: will it be effective?
In a word, in my opinion, no. He "suspended his campaign," which is total bullshit (he interviewed with Katie Couric that night, and appeared alongside Bill "The Traitor" Clinton), and which Letterman called him on. McCain didn't suspend his campaign at all. And I'm not a ratings expert, but I assume a good chunk of the American swing voter populace still watch Letterman. And I mean, Letterman is a Republican, is he not? Here's a pretty fun Repubilican-oriented guy calling out the head of the GOP for his bullshit move.
What McCain really wants to do is weasel his way out of the debate tonight. It's sort of a damage control thing. The debate is supposed to be about foreign policy, but everyone knows it's not going to be about that, and Jim Lehrer, God bless his heart, confirmed so in an e-mail: "I am not restrained from asking questions about the financial crisis. Stay tuned!" Gotta love the guy.
This debate is/was widely expected to be the most watched political debate of all time, more so than Reagan/Carter, which would put viewership above 80 million Americans. Now, McCain doesn't -gain- anything by skipping out on the debate, but he perhaps -minimizes damage- by not being seen as a doddering old fool in front of the dashing young man. That was always going to be the threat, since, let's face it, Presidential elections come down to how voters "feel" about candidates, largely, and those feelings are informed by visual information, not anything written or logical.
But - had McCain debated, and of course, lost, the mainstream media narrative would have been "McCain, as expected, won the debate, but Obama did surprisingly well," since the media have long decided that McCain is an expert on foreign affairs, which is untrue - he can't delineate between Sunnis and Shias, for instance - whereas Obama really is quite well versed on foreign affairs. In fact, while he's often described as the most "liberal" member of the Dems who competed this year, that is a total lie; he is the most rightist of any of them on domestic issues. It is on foreign affairs where Obama truly shines. That is his selling point, although the media, both mainstream and "alt," do not really depict it this way. But it's the god honest truth.
So - by claiming "he has to be in Washington to help fix the financial crisis," McCain can dodge the bullet of appearing just like Bob Dole did opposite Bill Clinton in 1996 - old, doddering, not in command of the issues, tempermental. However, what about the alternative?
If McCain does bail, Obama gets to go stand before Jim Lehrer for an hour or more (90 minutes, right?) and just EXPOUND. He basically will get widespread recognition for acting like an adult. That will be the narrative. Obama is an adult, and McCain is a coward. And as details of McCain's alternative bailout plan are leaked, the narrative will be McCain is a coward AND a fool. It would be a bigger win for Obama to actually debate, and kick Johnny boy's ass, but it is still an unqualified win for Obama, giving him that "reasoned leadership" edge he is often accused of lacking.
Of course, there's the alternative that liberals are worried about: McCain will stay in Washington, a compromise will be passed, and McCain will say "I made this happen! I'm Presidential!" Except, the problem is, this shit is not going to happen. And by injecting himself into the bailout's crafting, McCain has actually potentially subjected our country to a true collapse, a true Great Depression II.
How? It's simple. The political temptation for the GOP is to get the Dems to pass the bailout bill, along with a few sacrifical (East Coast) Rebublicans, and let the majority of the house GOP vote against it, and come back in 2010 with Republican Revolution II, saying, "The Dems voted for the biggest bailout in history! That's not fair to the taxpayer!"
Except that Nancy Pelosi doesn't have a brain made of jello, so, she insists on a bailout package that passes the House and Senate with wide bipartisan support.
But the house GOP is rallying around McCain for election season purposes. They're saying no way, Jose on the pretty fucking reasonable Paulson/Dodd/Frank compromise. BTW, for the record, the original Paulson plan was pretty scary and unreasonable - we'll get to that below - but he did effectively cave on all the major issues, mostly because the Bush White House has zero, zip, zilch political clout left.
So - the house GOP is going to doom the bill - but the Dems are in no rush to incorporate the bullshit GOP "alternative" into the bailout, because they too have to face voters in November, and they're not anxious to lose their seats. So what is going to happen?
That's a big question. Some sort of executive action of a pseudo-dictatorial nature? Don't rule it out, folks, the Presidency's power has been inflated beyond all good measure over the last century. But equally likely - no bailout deal. No compromise. And the continued collapse of major financial institutions, the total freeze of credit, and of course, massive layoffs. Great Depression II. Just like it happened the first time, when Hoover limped trotted out a sort of soft New Deal that never got off the ground.
And with Wall St. and Big Business generally livid as hell at the GOP for wrecking the economy, they are more than even behind the Dems. Mainstream media narrative (with the exception of Fox, but, maybe even them... I wouldn't be too surprised...) shifts to "McCain is selfish, foolish, and puts his Politics above Country" and "Obama has his head screwed on straight." Obama's victory in November is very narrow, just overcoming the "Bradley Effect" (which is the unstated racism we can expect, probably cutting somewhere around 5% nationally against Obama's poll numbers, the white folks who will never vote for a black man. Sorry, fellow liberals, that shit is real).
And then we get started on a New New Deal? Wouldn't that be something?
In the meantime, we all lose our pensions and our jobs. Enjoy!
UPDATE: It seems McCain will go through with the debate! I guess he decided to try to look less like a childish asshole after all. Prepare for your ass-kicking, John, it's coming tonight!
READING RECOMMENDATIONS: Just keep reading the Times, plus politico.com, rasmussenreports.com, wonkette.com, drudgereport.com, fivethirtyeight.com, and maybe some others to brighten your day.
Please Explain the Recent Series of Events that is Driving us to National Socialism
Silly liberal! This isn't driving us to National Socialism. This is driving us to Great Depression II. Come on, cheer up! We might get a New New Deal out of this shit! After we all lose our jobs and maybe our homes too, of course.
There are a lot on the left and right saying "nazis" and "commies" right now, but I don't think those are the right allegories, mostly because the Congress is finally Not Gonna Take It from Bush & Co. I guess it's possible that we can have some armbanded types in the future, but I think we need a real geniune Weimar Period first. Honestly, I have to say, I think the analogy is overplayed and inaccurate, and should be avoided. It allows the "mainstream" types to say, of those of us who would like reform, that we are "fringe wackos".
Let's get real: this is a total financial collapse. It has happened many times in American history. It's a very American/British phenomenon. But I am MORE than happy to try to explain how we got here. It's a wild story!
Ok. In order to understand the current crisis, you must understand that after the shit hit in the fan in the first Great Depression, three very important reforms were instituted, among others: the introduction of the Federal Deposit Insurance Corporation (FDIC), the legal separation of Commercial and Investment banking (more below) by the Glass-Steagall Act, and the creation of "Fannie Mae" and "Freddie Mac" (Federal something something something, who cares, everyone calls them Fannie and Freddie) to help facilitate both affordable home ownership AND liquidity in markets. Phew! WHAT THE FUCK DOES THIS MEAN, THOUGH, EXPERT you ask. And rightfully so. Onwards!
First off, when one refers to a "Commercial Bank" one is referring to a bank such as Citibank, Chase, Washington Mutual (R.I.P.), etc. This is a bank where you, the average schmuck, deposit your paychecks. You might get a mortgage loan from these banks as well. Businesses - the infamous "Main St." everyone is talking about these days - also deposit and acquire loans with/from the commercial banks. Including not just the saintly "small business," but also the villified "big business".
Investment banks deal in capital market transactions. This gives me a headache just trying to describe what that means. Basically, investment banks deal with investors, both individual and including hedge funds, mutual funds, and pension funds - your 401(k), baby! They also trade and sell cash and securities. They're MUCH more liquid than commercial banks, and much less stable. But the rewards, the yield, is much higher. Commercial banks issue stable loans and earn a little bit of return, slowly, over time. Investment banks can gamble and either lose or win big.
Back before the two kinds of banks were separated, banks were not commercial/investment... they were just banks. And they could gamble YOUR savings away on some stupid investment and lose it all. Which is what they did, and we had a bank run, and, fuck. Everyone was broke. So the FDIC was created, which is a government guarantee that your savings are insured up to a certain amount. And Glass-Steagall was instituted to lower risk.
Now, people are sayin "This shit could be Great Depression II". And they're right, but it'll be very different, because FDIC is still with us. You're not going to lose your (most likely paltry) savings. But in the late 90s, Bill Clinton tragically helped repeal Glass-Steagall. The differentiation between Commercial and Investment came to an end. And that's why you're not gonna lose your savings, you're gonna lose your job. I will explain below.
We also need need to explain Fannie and Freddie. Whenever there's a financial crisis, people don't know what the good investments are, so people hoard their money and no one invests in anything - this is what's known as a "credit crunch" or a term now being tossed around "credit FREEZE" (oh shit, bitches!). It means banks are not loaning to businesses, or to each other. Or, voila, to you, of course.
But what Fannie and Freddie, originally gov't run, are set up to do is to buy mortgages from banks, giving these mortgages government backing and making them an EXCELLENT investment. This not only means that home ownership was incredibly stable, a good investment, and rose for many years, but that for every mortgage a Commercial Bank sold to Fannie or Freddie, it freed up cash to invest elsewhere, stimulating the economy. This is "liquidity".
Now, in 1968, LBJ sold off Fannie and Freddie, which became Government Sponsored Enterprises (GSEs). This raised cash for Vietnam and made some bearish investors very happy. These were now private companies with public backing.
Sounds scary, right? Except Fannie and Freddie had very high standards for their lending practices - and continue to do so. They would not buy mortgages from people with bad credit. Period. So the privatization wasn't really that bad. Fannie and Freddie continued to function as before, except now that had a CEO and shareholders, who were making money but nothing on the level that a big company's CEO would make.
What Fannie and Freddie began to do wrong in the late '90s was: insufficient capitalization. They did not sell enough stock to maintain their balance sheets; that's why a government bailout was needed. But Fannie and Freddie were largely a victim of the housing bubble.
Skip back to the late '90s. At this time, Bill Clinton and the Republican Congress repealed Glass-Steagall. That's right, Bill Clinton, the "New Democrat," by and large turned his back on the New Deal, including this crucial risk-preventer. Soon the Commercial Banks were investin' in capital markets left and right, and soon there were just... banks. Not commercial, not investment, just banks (although some retained their historic roles).
The tremendous power of the former Commercial Banks could now be used to really make the markets crank. The dot com bubble really took off. And voila - it turned out to be a bubble. Too much cash was floating around withou the bottom line in place. So we had the recession of the early '00s.
But - that cash did end up going somewhere. It went into the next bubble, housing. This was made possible when some shrewd mofos figured out a couple of things. First off, since everyone was deciding real estate was a 100% win investment, that the value of homes would only ever increase - mass psychology is, by and large, what guides a given market, especially a very "free" one - banks started to figure that could issue "subprime" loans, i.e., loans to people with bad credit, figuring even these people would be able to pay off their mortgages because house values were just gonna keep increasing, right?
That's stupid enough, but the real chicannery came down to a new financial "instrument" the commercinvesto banks were now engaging in - the mortgage-backed CDO (Collateralized Debt Oligation). What this was was a sort of bundled investment, almost like a derivative, which included well-rated mortgages (AAA) and shitty, subprime mortgages... and most frighteningly, many other assets, including municipal bonds and other pretty valid, stable investments.
These CDOs flew around from bank to bank and a lot of traditional investment banks made the most money off of 'em. Housing prices just kept rising and rising and kept our economy somewhat afloat for many years. Certainly, some of the biggest banks to fail recently made a killing off these bundled investments, at the time, but essentially no one actually knew WHAT they were trading. They didn't know the extent to which subprime mortgages underlay these fancy-sounding, impressive CDOs.
It's like - what if I sold you a "Certificate of James Call: Expert" that included some of my favorite CDs, a couch, a usable hard drive, a bag full of cockroaches. But you had no idea what my Certificate meant, just that you could keep trading it for other certificates for more money everytime.
Well, we need to segue for a second into another trend of the '90s and '00s - the growth of the exurbs. Huge growth of suburb-like communities detached from any urban center. The ultimate logical extension of white flight, made somewhat feasible by telecommuting, amongst other things.
Except - in the end analysis - with oil prices through the roof, competition from abroad in so many traditional fields, and the threats to credit card holding consumers - who the fuck really wants to live in, say, Victor, Idaho? Or in the middle of Kansas somewhere, not on farmland but in a little suburb-like town? The answer: no one. Any moron with a brain could see this was a bad investment from miles away, and that eventually, housing prices would come down.
But see, here's the fundamental problem, and a big part of the reason why we're ALL fucked, not just Wall St. Since the late '70s, and especially the non-stop Friedmanite Reagan/Bush/Clinton/Bush years, finance, which used to be outweighed by manufacturing 2:1 in terms of the size of our economy, has grown to encompass 40% of our economy. Essentially, the shifting around of assets, not the actual PRODUCTION of ANYTHING, accounts for nearly half of our economy. So when a bubble collapses, it's much harder to ride out. We're all living on credit, including the businesses who employ us. This style of living demands a constant bubble, and when bubbles keep getting bigger and more ridiculous, crashes come much harder.
What's a real shame is that, since this subprime loans were sliced and diced and packaged up and spread throughout the whole financial system (worldwide, I hate to say, just like the first Great Depression), no one can identify the "bad" mortgage holders and the "good" ones. So people are, in essence, panicking, driving housing prices through the floor, and the good borrowers are being taken down with the bad ones, just as good loaners are in danger of losing out along with Bear Sterns and everyone else.
THAT'S why Fannie and Freddie fell - that and their insufficient capitalization. It's mass psychology. People with good credit who bought houses during the bubble are getting slammed, and are no longer credit worthy, so they're falling behind in their payments, and Fannie and Freddie had to apply for a bailout. If they had just collapsed, that would be the end, potentially, of affordable housing in this country. It will also seize up liquidity (well, this has happened, though, to a huge extent).
Now let's quickly review the fallen in these last tumultuous few months. First, their was Bear Stearns, a classic investment house who played the housing bubble/CDO game hard. They gambled big and totally collapsed - sort of amazing. JP Morgan Chase (proving to be a big gambler, and potential winner, in this whole thing) snatched up Bear at firesale prices. Bear is gone... one of the most notable names in American finance... gone. Incidentally, this sale to JP Morgan was done largely at the behest of the Fed (ah, the Fed. We'll "go there" in a minute).
How did Bearl? A BANK RUN! We haven't had a real proper bank run in a while.
After Bear came Fannie & Freddie, taken back over by the government, a market-reassuring move... but not reassuring enough, because next to fall were Lehman Brothers & Merrill Motherfucking Lynch, the dudes who made the "bull" in "bull market" famous! Yep, looks like Lehman and Merrill had some more of that subprime collateralized crap floating around, and while the rest of their capitalization was stable, people decided to sell 'em short and BAM! Down they went, Lehman just into bankruptcy and Merrill into a very cheapo buyout by Bank of America (slick move, BoA).
Let's stop and look at that term I just used: selling short. "Short Sellers" are currently either benighted villains or woefully misunderstand Randian heroes, in the public eye. I don't want to get, or give you, a headache by fully explaining short selling. Let's just say that it involves selling something you don't fucking own. Defenders of short selling defend it on the grounds that short sellers point out flaws in companies that others might miss. And, to an extent, this is true. But there's little regulation of short selling (or, well, there was. Treasury has now exempted over 800 stocks from short selling, in a bold, overlooked, and hotly contested move).
Let me offer my own analogy for short selling, and why I come down against short selling as currently being practiced, to take down firms that SHOULD be solvent, such a Lehman Bros and Merrill Lynch. Let's say we're having a loft party, and it's a great fucking time, we're all getting high and listening to music, etc. And I'm there, and I just -happen- to be a building inspector. And I notice the supports of the roof are rotting.
The responsible thing to do would be to say to a few people, "You know, I think we should get out of here, maybe. The roof is not in a good condition." And if they start freaking out, calm them down and say, "Dude, the roof MIGHT not collapse, but let's not take a chance. Let's go to the bar down the street." And then the party might slowly mellow out and disperse.
Now let's assume, instead, I start screaming at the top of my lungs, "HOLY SHIT THE ROOF IS GOING TO COLLAPSE!" Then, everyone runs to the doors in a panic. People get tramped and the shit is just no good. When Merill Lynch can be taken down in a couple of days, that's what short selling is like. I don't care how they defend themselves, they are part of the problem.
Ok. Now let's touch on our central bank, the Fed, which can sort of control our money supply. Obviously the Federal Reserve Bank and it's chairman (currently Ben Bernanke) are closely watched by economists and market types. And should be watched as closely as the President by every American, but I digress. When the Fed lowers its interest rates, banks can borrow money - from the government - cheaply, and liquidity flows. Laissez le bon temps rouler. This is what happened under Alan Greenspan, and look, we got this housing bubble.
At the end, fearing inflation, Greenspan cranked the fed funds rate back up, and then bowed out of his job, revered as a God of Finance. Then poor Ben Bernanke got the job, and things went fine for a while, but to prevent the shit hitting the fan, Ben tried cutting the rate down from 5.25% to about 2%, hoping to spur liquidity. Perhaps this sent the wrong signal to the markets, who started freaking the fuck out instead, but I can't blame Ben for trying.
The Fed has been largely impotent over the unfolding crisis. It just can't inject liquidity into a market where no one knows what a good investment is anymore. That's the panic in a nutshell right there. People are making bank runs on really pretty solid institutions. The government had to step in and sort of bailout AIG, formerly highly respected, now history (I think Barclay's is getting a chunk - the rest are "toxic assets," i.e., subprime CDO junk). Morgan Stanley narrowly avoided a panic, and, who am I forgetting? Well, Washington Mutual, as of this morning, is toast, it's investors non-reassured by the politicking going on over the bailout bill currently - all McCain's attemps to skip out of a debate with Handsome Young Black Man - way to put country first, John!
Now, let's recap. We still have the FDIC, so none of us are going to lose our savings, if we have them. And a bailout is guaranteed, so the stock market is going to stay in place, most likely, though I could be very wrong about that. Nevermind that, accounting for inflation, the market is way down from the end of the '90s... let's just stick with the absolute, not the real, number... hovering around 11,000.
What's going to happen instead is that credit is going to dry up. The final two true Investment Banks - Goldman Sachs and Morgan Stanley - are asking the government to regulate them as per commercial banks. It's amazing, and not a happy result. They want to remove risk, and who can blame them, but they also won't be doing any serious investing sometime soon. Meanwhile, while JP Morgan is making out nicely, even collassal Citigroup, the 800 lb. gorilla, has a sizeball chunk of questionable assets and will not be agressive in its lending anytime soon.
They're moving all their investments over to treasury notes, which have about a 0% yield at this point. Basically, credit is frozen. So where are small and big businesses going to get their money for payroll in these coming months? The question is: from either in-house, or nowhere. Except major layoffs and downsizings coming soon, to an Election near you!
This is in addition to our own personal finances, which are fucked. Many of us are screwed by the adjustable rates on our credit cards, and our mortgages. We're about to lose our jobs and we have major debts to pay off. Our 401(k)s are other seemingly safe investments are also, perhaps, toast. What we need is a classic cry heard throughout America, Britain, and Australia throughout history - and it's why I reject the Nazi or Commie scares of both the left and right. We need debt relief! This was the cry of the populists in the Gilded Age! We need debt relief and we need it NOW.
But we are not going to get it.
Treasury Secretary Paulson walked into a real shitstorm in Congress this week with his $700 billion bailout plan, which many experts say could really end up being $1.3 trillion. He demanded, among other things, that no review or oversight by courts or other bodies be allowed. Legal immunity! I swear, only in the Bush administration.
His plan also proposed to buy up the CDOs, the toxic assets, and just have taxpayers pay for them, so that the banks could get their good credit back, but does nothing to address the credit of the consumer, who is, hey, also the taxpayer... oh, and, we haven't mentioned this in a couple of decades, but also the worker.
Chris Dodd and Barney Frank, God bless 'em, said, "Politely go fuck yourself Mr. Paulson," and he did, indeed, totally cave, amazingly, probably because President Bush is the lamest duck of all. The Paulson/Dodd/Frank plan did NOT include the ability of those with mortgage woes to get their rates adjusted by court - very sad - but it did, at least, revoke the legal immune, grant oversight, and ensure that the bailout agency was buying not only the bad assets, but also equity shares in the institutions they're buying them from. There's a word for this: nationalization. A lot of dumbasses flinch when they hear this word, but hey, it's been done before and it WORKS.
It's not total nationalization anyways... it's just the government acquiring a stake in these banks, ensuring that some day we can sell this stake off and maybe make a profit, on behalf of the taxpayer. Of course, part of these profits were pledged to DEBT RELIEF. Oh boy. Debt relief! Fuck, are we just going to keep electing Republicans who drive up debt and then Clinton-style Dems who act on debt relief and temporarily recapitalize our banks and get credit flowing again?
Still, while I object to much of the bailout, it's crucial to free up capital to get it to businesses who employ us. Because where else are they going to get the money for payroll, equipment, etc? They really don't have it. Main St. relies almost entirely on Wall St. for this kind of funding. So a bailout is ugly, but necessary.
Furthermore - the bailout package restores New Deal regulations to a large extent. And by God, that's what we need.
In terms of ushering the bailout package through Congress, it all looked good 2 days ago. One would think what would happen is the Bush admin would try to get the Dems to vote on the package and most of the GOP would sit it out, running in 2010 claiming the Dems presided over the biggest bailout of all time. But Pelosi and Reid will not be sacrifical lambs, and they demanded wide bipartisan approval.
And by God, they almost had it, until McCain flew into town saying "hold on a sec," and giving the house GOP an opportunity to scuttle the whole thing. It's not that McCain has a plan - he doesn't - and the House Minority Leader Boehner plan is to just give these banks a ton of cash with no new regulations - because, hey, that's working so well right now, right? I know that when someone robs my computer, I try to get his address so I can send him a laptop, myself.
Anyways... credit is dry. Financial institutions have died. We don't know what the bailout proposal is going to be exactly; we only know we need one. The Dodd plan was pretty good. The GOP House plan is pretty terrible. Worse than the S&L bailout plan. God only knows what comes next - hopefully real regulations, including a sensible approach on short-selling, more restrictions on CDOs and derivatives (a sad tale for another time). We're getting an exectuive salary cap, which a lot of people are calling bullshit, but, are restrictions on drunk drivers bullshit, even if most drunk drivers don't get into accidents?
But all this shit is gonna cost up to $1.3 trillion potential, so don't expect that "health care" or "victory in the war on terror" or "new highways" you were expecting anytime soon.
Good time to invest in oil, though! That shit ain't a bubble!
I hope this has been informative. If I write any more at this time my arms will fall off. This has only skimmed the surface, but I hope it's made some of you more interested in this meltdown. I'm going back to obsessively scanning the websites now. Please feel free to leave comments, attacks upon me personally, or further questions.
RECOMMENDED READING: Holy fuck, there's an ocean of it. I stand by Paul Krugman despite what many people say. He might have been wrong on globalization and Iraq initially, but he's more than acquitted himself. All his books are worth reading, and they're easy reads. If you only read the newspaper twice a week, read his columns on Monday and Friday in the NY Times. You can skip basically every other weekly syndicated columnist in this country, in my opinion. Some of them may make you feel warm and fuzzy but none of them give you the facts you need to know.
Also read Wall St. by Doug Henwood. A bit dense, but indispensible to understanding some of these financial instruments. The Shock Doctrine, mentioned above, is only tangentially related to the subject but still helps you understand the larger debates about Keynesianism vs. Monetarism we're about the get into... well, many of us are already into it. Anything by Joseph Stiglitz is a must read. Three Billion New Capitalists by Clyde Prestowitz paints a new way forward in a statist way that I respect. And I eagerly look forward to reading Bad Money by Kevin Phillips, a fantastic author and former (now disgruntled) Republican with a great grip on how finance has ruined things in the past few decades.
There is much more to read and recommend... I barely know where to start. Keep reading The Economist from time to time to get a scholarly but Wall St. perspective. And read Secrets of the Temple by William Greider if you want to understand the Fed, monetarism in practice in this country, and whether inflation is necessarily always a bad thing and a strong dollar always a good thing, especially if you're in debt.