Felix Salmon came back earlier this week and has dived right back into parsing the turmoil. Today he addressed the rising unemployment rate—which, as we've learned, is at 10.2 percent, its peak since 1983. Salmon takes the time to draw out the implications of such high unemployment and comes to a rather depressing conclusion. At the first level, he points out that consumer spending will continue to decrease as unemployment increases. Makes sense. And it also makes sense, he says, for the Fed to keep interest rates at or near zero while so many Americans are out of work. And this is where it gets complicated, according to Salmon and Mohamed El-Erian, whom he quotes throughout his post. El-Erian—the CEO of Pimco—writes in the Financial Times, "There is one public good that needs to be replaced: the key role that the US has played as the engine of global growth. This role is now constrained by the debt of US households." And Salmon believes that this shift calls for a structural change to U.S. global and economic policy and, more importantly, swift and coordinated action. But Salmon is skeptical. He says, "So far I’ve heard nothing out of Washington which says to me that the White House has a plan for addressing long-term structural problems in terms of unemployment, capital flows, and interest rates." And the depressing conclusion: "Maybe, then, there simply isn’t a solution: the problem is just too big, too complex, and too intractable."

Paul Krugman, though, discusses one possible solution: a New-Deal-era Work Projects Administration. He says, "You can make a pretty good case that just employing a lot of people directly would be a lot more cost-effective; the WPA and CCC cost surprisingly little given the number of people put to work." Although Krugman considers a Work Projects Administration to be a viable solution, he, too, is skeptical saying that government and politics often move too slowly to stop the bleeding. "So why aren’t we doing this? Politics, of course: government is the problem, not the solution, even when it is, you know, the solution, and cheaper than running things through the private sector."

Brad DeLong also takes a look at the unemployment rate and looks back into his own blog history for a cause. In July 2008, DeLong wrote, "If we find ourselves in a financial-meltdown world where unemployment or inflation kisses 10%—then I will unhappily concede, and say that Greenspanism was a mistake." To make good on his promise, today he writes, "Yes, it was a mistake. I hereby deny, abjure, and repent my previous allegiance to the gospel of 'Greenspanism.' I reject Greenspan, and all his works, and all his empty promises ... I will strive now to walk in the light."

On another note, Barry Ritholtz also scowls at our government for considering measures to scale back the regulations in the Sarbanes-Oxley Act, passed in 2002. "So long economic collapse," he says,"hello accounting fraud." The Sarbanes-Oxley Act was passed in response to Enron and the like in order to ramp-up regulation. Ritholtz quotes Floyd Norris, who writes, "The House Financial Services Committee this week approved an amendment to the Investor Protection Act of 2009—a name George Orwell would appreciate—to allow most companies to never comply with the law, and mandating a study to see whether it would be a good idea to exempt additional ones as well." Then Ritholtz points out that the recent "near systemic collapse" was caused by banks given special exemptions. The main culprits, according to Ritholtz, are aggressive lobbyists who continue to push for less transparency and less oversight. He says, "This is a shameless attempt for a freer hand to avoid responsibility and correct marking of assets."