1. Another Frightening Show About the Economy, a special edition of NPR's popular This American Life, is a nice, patient, non-condescending explanation of the complexities that brought us to this point (at least as of last week, when it was produced). For one thing, it (indirectly) explains why Paulson wanted all that unchecked power to implement the bail-out: the deal hinges on smart pricing of the distressed assets the government will buy. Price them too low and you hurt the banks more than you help. Price too high, and taxpayers don't get their investment back. It's extremely difficult, Paulson's extremely qualified, and it wouldn't help to have several hundred indignantly posturing politicians breathing over his shoulder.
2. No explanation's perfect. And NPR's Adam Davidson, the main force behind the program, screws up one thing: he describes the distressed assets as junk. That's a popular assessment, but Warren Buffett disagrees. Buffett (who may be Obama's pick for treasury secretary) has declared that if he could get in on a piece of the government's side of the deal, he'd jump at the opportunity. And his wisdom in deal assessment is long-proven. He explains all this in a recent interview on Charlie Rose.
3. The mainstream media is doing a clunky job. The problem is that most financial reporters aren't all-around finance experts (if they were, they'd be in a far more lucrative field); their knowledge is constrained to the sort of thing they usually report on. And no one reports consistently on the commercial paper market! I've been depending on The Economist, which so far has been clear, thorough, and reasonable.
4. Whether your interest in this crisis is selfish (i.e. you're displeased by your 401K losing 1/4 of its value) or historical (one day you'll tell people you were alive for this), you may kick yourself later if you don't keep up with the daily goings on. The situation keeps changing, with each day bringing, or at least revealing, a whole new situation (this explains why Congress - and the constituents they've been trying to represent - did an utter about-face on the bail-out in the space of a mere week). One good way to stay up is via a podcast summing up each day's developements. The NPR: Planet Money Podcast is a half hour report, produced by the same people who did the This American Life explainer mentioned above (not a completely reliable source, but, hey that's why I suggest the weekly Economist).
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