Until the past few weeks, the financial panic was still mostly far away on Wall Street. But not now.

Car loans, mortgages and college financing are suddenly harder to come by. Millions are stuck in houses not worth what is owed on them. Cash-strapped consumers are cutting back. The economy is slowing. Jobs are disappearing. Who wants to open quarterly 401(k) statements only to learn that everything they put away in retirement accounts the past two or three years is gone?

There is plenty of blame to go around. Greedy Wall Street speculators took mega-bonuses even when they knew their leveraged companies were tottering -- and someone else would pick up the tab. Crooked or stupid politicians allowed Fannie Mae and Freddie Mac to squander billions, as they raked in campaign donations and crowed about their politically correct support for millions of shaky -- and now mostly defaulting -- buyers.

The new national gospel became charge now/pay later and speculate, rather than put something away in case of a downturn. To provide more goodies that we hadn't earned, politicians ignored soaring annual budget deficits and staggering national debt and kept spending.

But amid the gloom, there are some valuable lessons that we can take away from the Wall-Street panic.

First, cash really is king. For all the talk of a trillion here or billions there, when the crunch came many of these investment houses and their once-strutting managers found themselves with a minus net worth. They were desperate to find liquidity -- any money anywhere they could find it. Pedestrian passbook savings accounts proved wiser investments than all the clever hedge funds, derivatives and sub-prime schemes put together.

Second, wisdom and blue-chip college educations are not quite the same thing. The fools in Washington and New York who blew up Wall Street had degrees from our finest professional schools.

The most chilling example, at the very beginning of this ongoing mess, came in 2003 during the House Financial Services Committee's hearing on Fannie and Freddie. At one point, Harvard Law School graduate Rep. Barney Frank, D-Mass., asked Fannie Mae CEO and fellow Harvard Law School graduate Franklin Raines -- who took millions in bonuses even as he helped bankrupt the once-hallowed institution -- whether he felt the mortgage giant had been "under-regulated." Raines answered him under oath, "No, sir." Then overseer Frank announced, "OK. Then I am not entirely sure why we are here." Continued...