doom, gloom

by Hugh

From Harvard professor of economics and former IMF chief economist, Kenneth Rogoff, in the Financial Times:

Were the financial crisis to end today, the costs would be painful but manageable, roughly equivalent to the cost of another year in Iraq. Unfortunately, however, the financial crisis is far from over, and it is hard to imagine how the US government is going to succeed in creating a firewall against further contagion without spending five to 10 times more than it has already, that is, an amount closer to $1,000bn to $2,000bn. [more…]

From the Washington Post:

From the rescue of Bear Stearns to the takeovers of Fannie Mae, Freddie Mac and American International Group, all the key decisions have been made by Treasury Secretary Henry M. Paulson Jr., Federal Reserve Chairman Ben S. Bernanke and Timothy F. Geithner, the president of the Federal Reserve Bank of New York…

As they chart a government response to the crisis, the stakes could hardly be higher. If they succeed, they could tame the economic downturn and orchestrate a restructuring of Wall Street with minimal collateral damage. If they fail, the toll could be millions of jobs, trillions of dollars in lost wealth and a crisis of confidence in global capitalism. [more…]

Meanwhile, on Planet Mars:

At a rally in Ohio on Tuesday, GOP vice presidential candidate Sarah Palin told the crowd that she’d head up energy policy in a McCain administration.

“John and I, we’ve discussed some new responsibilities that I’m going to have as vice president,” Palin said. “First, I’ll help to lead the mission of energy security.” [more…]

Fasten your seat belts.