Walden Bello breaks down the current financial situation in terms of capitalism's tendency toward crises of overaccumulation- ie when an economy's productive capacity out paces its capacity to consume. Essentially, workers are not paid enough to buy what they produce. As a consequence inventories grow, prices fall, and firms collapse. Firms with sufficient capital and political connections to withstand the crisis can then swoop in to buy un or under-used assets at bargain basement prices.

Bello analyzes the financialization of capitalism (the shift away from investment in productive enterprises such as agriculture and manufacturing toward speculative enterprises known as FIRE: Finance, Insurance, and Real Estate. The theory is that there is always a bigger sucker out there somewhere - I'll buy for $1 because some idiot out there will surely pay $2) as a proposed solution to the 1970s crisis of overaccumulation, and the root of the current meltdown.

In a restaurant yesterday I overheard some pretty undeniable common sense. A patron explained to a fellow patron: "if the problem is that banks are failing because people can't pay their mortgages, why not give homeowners $700b, they can then pay there bills and the problem is solved..."

Nobel prize winning economist, and University Professor at Columbia. Joe Stiglitz makes essentially the same argument.