When Paul Krugman begins a column this way, it does get your attention:

Will the U.S. financial system collapse today, or maybe over the next few days? I don’t think so — but I’m nowhere near certain. You see, Lehman Brothers, a major investment bank, is apparently about to go under. And nobody knows what will happen next.

People with online brokerage accounts probably put their sell orders in last night. This will not be a happy day at the New York Stock Exchange.

At the Agonist, there’s a discussion among some of the smartest people in the blogosphere about what’s happening with financial institutions. I recommend it. The consensus is that we’re unlikely to see a massive 1929-style stock market crash, followed by the second Great Depression. We are more likely to experience a series of dips and recoveries over the next few years, but overall the market will be drifting down, not up.

In any event, Treasury Secretary Henry Paulson and the feds are shoving everything they’ve got under the markets to keep them propped up until after the November elections.

Expect all candidates to be spitting out the word “change” at machine-gun pace today. McCain and Palin will continue to talk about “cleaning up” Washington and, thereby, Wall Street. However, when McCain and Palin talk about “change” and “reform,” they are talking about cleaning up corruption, not changing the system. As I understand it, today’s crisis wasn’t caused primarily by corruption, in the sense of doing something illegal for personal gain. It was caused by the system.

The McCain-Palin campaign (or should that be Palin-McCain?) also opposes the very kind of “propping up” that the feds are doing. They’ve been calling the government takeover of Fannie Mae and Freddie Mac “spending the cookie jar.” The takeover is likely to cost the Treasury $100 billion to $300 billion. $300 billion is roughly equal to three years in Iraq War dollars.

Yes, this is seriously bad, but McCain-Palin are focusing on symptoms, not the disease. They continue to pledge allegiance to deregulation and Reaganomics.

Andrew Leonard writes at Salon:

Over the last three decades Wall Street sought, and received, a climate of deregulation and minimal oversight that allowed it to create new markets at will, permitted investment banks and commercial banks to commingle their activities, and exempted critical new innovative financial products from any meaningful government restraint.

Now, we are staring at the kind of mess you get when you give two-year-olds a few buckets of paint and tell the baby-sitter to take the day off. Clean-up is going to be a bitch.

“Last three decades” = rise of Reaganomics. Thanks so much, Ronnie. Note that the rise of Reaganomics to some extent preceeded Saint Ronald’s ascension to the presidency. To some extent the right-wing “deregulation uber alles” ideology was also promoted by the Carter Administration. Some of the deregulation that Saint Ronald gets “credit” for actually began under Carter. But Reagan accelerated it, big time. There’s some historical background here (scroll down a bit).

Short-term, the challenge to the Obama campaign is to get people to understand that we face a systemic crisis more than a crises of corruption, and that Palin-McCain’s “change” message is not about the kind of change that’s needed. People need to hear, over and over, that Palin-McCain’s economic policy proposals are no different from what George W. Bush has been doing. Long-term, the sad fact is that, thanks to Reaganomics, there will be no money to do much of the good stuff Obama wants to do.