...is how the assets of a defaulting bank/brokerage are distributed. The extremely wealthy, who have the kind of money that makes high-risk/high-return investments a good idea for a big chunk of their portfolios are now on the same footing as pension funds and small individual investors who can't afford to (or shouldn't) make high risk investments.

New rules should be put in place that ensure that its "the little people" who get as much of their money back as possible, leaving those who can afford to take a big hit to suffer the consequences of their greed.

charged with fighting inflation under Carter and remained awhile with Reagan.

His tight money policy caused the highest unemployment rate since the Great Depression.

People tend to go back to things they saw as working for them previously.

And, it was mostly working class and lower middle class which paid the price, iirc.

worst appt Jimmy Carter ever made.

Summed it up, I think, in terms of how the elite are seeing this crisis (emphasis mine):

When I see suburbanites setting up braisers and selling squirrel skewers, then I will know we've learned. Until then I think we are going to get the response of printing paper, and then having elites get together and figure out how to slice away another slab of middle class expectations.

In their minds, this is a paper crisis. In their minds the same people who were in charge before, will be in charge now, only with non-voting government shares on the books. The people like Instablunder who pimped this slide, will still be well paid and on the inside.

They weren't wrong, they aren't sorry, and that means it is going to happen again.

Right now, what we have are the elite arguing over how to keep this mess going so that they can continue to act as they have for the past 30 years (and that includes Volcker's time as head of the Fed). Middle and poor America will once again be told that there's no money to help them in any meaningful way while the elite scramble to keep the good times rolling for themselves. And I include Obama's tepid plans, which may be better than McCain's in that he's not going to bomb our burning house, but that doesn't mean he's currently* planning to do anything more than try to douse it with a 12 oz. bottle of Evian dressed up as a tax credit here and a brief moratorium on foreclosures there.

But so long as the focus is on how to fix and maintain the current system, instead of rejecting the last 30 years of economic bullshit the Chicago School has been peddling, we are fucked.

* I continue to believe there is a chance that Obama will modify his plans for his own political survival. The only question is how much pain will the country have to suffer before he gets his come to Jesus Keynes moment. My prediction - lots.