The right way to begin to deal with the Wall Street financial crisis is from the bottom: protecting the people who took out those adjustable mortgages and complex products which offered no interest loans, and other "free lunch" incentives.
The first step should be a nationwide freeze on foreclosures and interest rate "resets." People who could make mortgage payments at low interest rates could keep on making their payments. This freeze should be indefinite, while we sort out the complexities of the global situation. The at-risk mortgages would hold their value, rather than turn into foreclosure liabilities.
The second step is to resist the call to bail out the Wall Street firms who took unnecessary risks. If public funds are to help stabilize Wall Street, then the government should take over entire companies, restructure them, then resell them, rather than buying only their bad debts.
This is a beginning: the principle is people first, not the companies who brought about the crisis.
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I am of two, three or four minds on the "bailout" -- but I really liked Bernie Sanders' suggestion (in his 10/1/08 speech on the Senate floor) to fund a major part of the bailout by significantly raising the tax rate for those earning $500K or more a year. His amendment, rejected by the Senate and otherwise probably received as a "poison pill" in the House, was based on the assumption that those are the people who benefited most by the deregulation policies that brought us to this point. (Well, time for me to see how much I lost on paper today.)
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