In a Boston Globe article a few days ago - "Economy will be the driving force" - I was quoted as saying that President-elect Obama has to be careful about just how much he regulates the economy.
....economists caution Obama to not overreach and impose too much regulation on the financial sector. Ultimately, they said, growth depends on a flexible economy in which capital flows freely and investors take risks needed to fuel innovation.
"The trick is to thread the needle," said Robert Litan, vice president of research and policy at the Kauffman Foundation of Kansas City, which studies and promotes entrepreneurship. "You need to fix the system, and keep it safe, but not make it so rigid that it deters risk taking."
The bank bail out will work, but it will take time. Here is another quote of mine in the The Wall Street Journal (sorry, but I think this one is firewalled at the source):
"Every bank that is getting a government injection will want the government off their backs," said Robert E. Litan, a senior fellow at the Brookings Institution and vice president of research and policy at the Kauffman Foundation. "This program has been structured deliberately to give maximum incentive to the banks to buy the government out at the earliest possible date. The ball is in the banks' court, not the government's court."
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