Let's step out from under this mushroom cloud for a moment to consider what the policy priorities are for working Americans and New Yorkers.

Helping Homeowners helps the economy.
The economy is reeling primarily because of instability in housing prices, a point that was recently reinforced by Former Fed chairman Alan Greenspan and the New York Times. But recent federal legislation, at best, will assist a fraction of the 2.5 million homeowners in foreclosure. If we want to lift ourselves out of this financial crisis, foreclosure prevention should be immediately put back on the national agenda.

Consider economic stimulus for New York, where the economic impact on New York will be acute.
According to the Gotham Gazette, Governor Paterson estimated that this recent Wall Street meltdown could cost the state "$1 billion in lost revenue in six months and put up to 30,000 people out of work".

The Indpendent Budget Office estimates a loss of $50 million in New York city revenues. As reported in yesterday's New York Times,

The mayor’s biggest challenge: how to deal with what are likely to be thousands of layoffs over the next few weeks, and the resulting loss of tax revenue on personal income, corporate profits and real estate transactions. If Lehman, which employs 25,000, files for bankruptcy, as expected, most of its employees could lose their jobs. And once Merrill is sold to Bank of America, the new owner is expected to cut many workers to avoid overlap. Merrill employs 60,000.

Wall Street firms, and their wealthy employees, account for about one-fourth of the city’s personal income and 10 percent of the taxes — so as Wall Street goes, so goes the city’s economy.

The city already expects budget deficits to balloon over the next several years — to $2 billion in 2010 and $5 billion in 2011 — as a result of major losses on Wall Street and the implosion of Bear Stearns earlier this year.
Now, with Lehman Brothers expected to file for bankruptcy, those numbers may need to be revised again.

Resist efforts to gut and privatize Freddie Mac and Fannie Mae.
Freddie Mac and Fannie are in the prone position. Many in Washington see this as their opportunity to effectively dismantle the two GSEs. Progressive legislators must stand by to make sure that Freddie and Fannie's affordable housing capacity, function and agenda are not abandoned.

Impose checks and balances on Bank of America
As Matthew Lee from Inner City Press recently observed, there is little attention being given to the fact that Bank of America, which is acquiring bank deposits through its acquisition of Merrill Lynch and already holds about 10% of American bank deposits, is on the brink of violating an important FDIC rule:

As a result of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, no insured bank or bank holding company can accumulate a concentration of more than 10 percent of the domestic deposit market through an interstate merger with, or acquisition of, an unaffiliated insured bank.

As we've seen in the past, megabanks exert too much control over the market, limit consumer choices and are prone to abuses of power. Regulators need to re-assert control over BofA's growth.

Vote on the Economy
Considering the state of the economy, voters should judge who the real "change" presidential candidates are by their economic policies. Both McCain and Obama have talked about regulatory overhaul, but discerning voters must look beyond populist rhetoric to see who has specific plans to fight predatory lending, reform the credit and mortgage markets, and establish more affordable housing opportunities. Of course, DMI will be on hand to help with the analysis.