This was really a critical insight in the speech. When someone's upside is a huge bonus based on a single fiscal year's results, and their downside is a golden parachute while watching others pack up boxes for uncertain futures in new jobs that may or may not exist, there is no incentive not to take risk with others' money. When the "others" are the taxpayers, the incentive is even less.

I learned this lesson in a couple of sideshow engagements related to the Penn Square scandal way back in 1982. Oil prices, interest rates, real estate values, everyone of these bets with someone else's money comes with a nearly limitless upside if you bet right, and minimal downside if you bet wrong.

Is it time to tell people their bonuses will be held in escrow for five years, or forced to be invested in the institutions they claim to have benefited?

Do you want to leave the impression that the health and stability of our econimy is simply a matter of having enough regulation?

Corruption is the 600 pound gorrilla you Democrats never want to face, and it is a corrupt government which did not sufficiently regulate Fannie Mae and Freddie Mac, and which pushed our banks and S&L's into the undertow of subprime lending.

Regulations generally come with loopholes. Rostenkowski made a killing structuring tax law with special exceptions for the wealthy. Barry 0 has many super wealthy people sending him gobs of money. Most of them don't rely on paychecks or salaries, so whatever he takes out of pay checks is jus fine by them. The aspiring middle class will as usual get screwed, and the really rich will stay that way thanks to their connections. But Obaba is even worse than corrupt: He's energized by far left politics, and, under the tremendous pressures of a presidency, he could damage our nation beyond recognition as a once free and prosperous society.

Obama is a corrupt politician from one of our most corrupt states. He is a product of Illinois Politics and is beholding to the Cook County Machine. If you could bring yourself to look, (Alinsky, Ayers, Blagoyavich, Daley, Dohrn, Jones, Rezko, Stroger. Wright) I think you'd be sickened by the slickness he has utilized to propel himself into a position which would grant him ultimate power over our lives.

You are a gentleman, and I appreciate tone of your posts, but, deep down, you're probably just as biased as I am.

Transparency, change, and complaining about Washington politics (you know, business as usual), have been the guts of all of Senator Obama's campaign speeches (throughout the primaries and to date).

I cannot and do not recall having heard Senator Obama warn citizens to pay attention to their investments, OR ring the alarm about the financial peril now at hand.

Since "Washington" is at fault, where has Senator Obama been?

Where is Senator Obama; besides traveling around campaigning to be our president?

What has Senator Obama been doing; besides complaining about this country, and the "business as usual Washington politics?

It's easy to complain.

It's easy to blame.

And, it's easier to say, I told ya so

... about Iraq, George W. Bush/& his party, and "Washington"

(please, tell us something we don't know).

More importantly: There is nothing uniquely promising about g a Washington politician who blames "Washington" for the problems in this country; as reason to be elected our Commander and Chief or THE President of change.

Then again, Mr.Obama is only a humble Illinois Senator.

Your post is mostly right about Becker, but poorly informed regarding Behavioral Economics.

One of the key advances of Behavioral Economics is that it has revealed experimental situations where people consistently behave irrationally, even with their own money. And, in many cases, that government regulation (particularly defaults that are in the interests of inexperienced economic players) could potentially improve economic outcomes.

Because this directly contradicts core assumptions of the Neo-classical economic theory, currently the dominant viewpoint, it is a big deal in the field.

Indeed, Harvard psychologists Kahneman & Tversky two of the earliest researchers who shared the Nobel Prize for Behavioral Economic work (the other was Vernon Smith at George Mason), focused most of their attention on the areas where people are inclined to make mistakes with their own money. And this kind of research is now leading to completely new ways of thinking about regulation and many prominent researchers are suggesting that, in fact, we need government to set more defaults, not fewer.

I suggest that you read this popular introduction to some of the research to get a better sense of what it really is and how game-changing it could be:

http://www.amazon.com/Predictably-Irrational-Hidden-Forces-Decisions/dp/006135323X

It was interesting to me that some of the letters here said that the present financial circumstance was NOT about de-regulation.

It has been a staple of conservative philosophy to de-regulate. That regulations were obstructions to the success of different businesses. Regulations were bureaucratic attempts that had intention to help, but were problems. Reagen said "the government is the problem" and regulations were point one in what that meant.

The economy is a very complex institution and that is why there is a academic descipline called economics. Often you can take data about the economy in many different ways and those ways are valid, not just political takes or classic spin. What is happening in the financial market IS primarly what happens when there is no effective oversight. If you don't agree on that, there is little we can take intellectually from this crisis. However the majority analysis of what is happening, it is about de-regulation and the dark side of that stategy.

A potential good side of this crisis is that it can be a window to seeing a complex issue like the economy in a way we can see an effect of a theory. I think we can see that de-regulation does not work. In Reagen speak there is a role for government. I think a very basic aspect of the debate of the conservatives and liberals is the view of the progressives/liberals that the "free market" works better if they are regulated and therefore balanced between the forces of profit and the forces of the common good.

Also reading what he said I was struck that a major analysis of his "message" was that it was not specific. I think that plan was pretty specific.