THIS IS SOME OF THE CHANGE WE NEED

So far, the Paulson/Bernanke "plan" to deal with the Crunch hasn't been very effective and seems to neglect the real economy. Prof. Elizabeth Warren, who used to post at TPM, chairs the panel that is suppposed to oversee the "plan" and I think she understands that a top-down approach isn't enough.

Bailout Monitor Sees Lack of a Coherent Plan
By DIANA B. HENRIQUES
Published: December 1, 2008
NY Times

“You can’t just say, ‘Credit isn’t moving through the system,’ ” she said in her first public comments since being named to the panel. “You have to ask why.”

If the answer is that banks do not have money to lend, it would make sense to push capital into their hands, as the Treasury has been doing over the last two months, she continued. But if the answer is that their potential borrowers are getting less creditworthy with each passing day, “pouring money into banks isn’t going to fix that problem,” she said.

Meetings with Treasury officials so far have made her question whether they understand that “household financial health is profoundly tied to the economic health of the nation,” she said. “You cannot repair this economy if you can’t repair those families, and I’m not sure the people directing the bailout see that as their job.”

In her view, the government should be trying to create more reliable customers for those banks by shoring up the fragile finances of the millions of American families that could not save, borrow or spend even if their banks were flush with capital.

“Any effective policy has to start with the households,” she said. “Years of flat wages, low savings and high debt have left America’s households extremely vulnerable.”