Nouriel Roubini explains how the provision that enables the federal government to directly buy equity in banks came to be added to the bailout bill. (You have to register to read the full article.)

The short description is that Democrats in Congress added the provision during the negotiations. Liberal economists like Brad DeLong argued in favor, and Tyler Cowen explained why the plan may not work in America.

In general, these are the times when all of the economics bloggers earn their stripes. Apart from software development, I’d say that economics is perhaps the best covered topic in the blog world (celebrity gossip notwithstanding). There are brilliant bloggers representing just about every school of economic thought, and for the most part they engage with one another rationally and without malice.

Over the next few months and years, we’ll learn a lot about which of the schools offer the best insight into what’s happening right now.