I'd suggest either a simplified economics 101 textbook (simplified as this stuff is so dry) or reading The Economist for a time -- The Economist is weekly, but if you're looking to understand the economy, you can skip all the foreign stuff, which is a big portion of the magazine.
Stay away from businessweek/newsweek -- they're primarily populist magazines written, in general, very simplistically.
Freakonomics was OK, but it was pretty peripheral; kind of a handful of snippets about intersting observations rather than an overview of how the economy works, although the author is supposed to be quite well respected. (and he teaches at a great school!)
Just be prepared for it to take a while to understand this stuff - macroeconomics is still tough for me to get my arms around, as an econ major -- when the government buys back T-bills or bonds it pushes more cash into the economy etc..
The tough thing about much of this is when a central banker (Ben Bernanke for now) thinks he or she is doing well, it may take a few years for the economy to respond to their actions, and by then it's too late to change course.
Couple things to keep in mind for anything that you read -- the idea that capitalists are "bad" and "greedy" often means either systems were set up badly by the Government (like when money was made artificially cheap by the Fed, pushed down interest rates which pushed up housing prices; then the mortgage companies became "bad") or someone has a "shoot the messenger" philosophy, such as those who say speculators are evil. In this last case, speculators only make money if they bet that prices will go up, or down, and within a pretty short time frame, prices do move that way. It's close to impossible to corner a market; speculators are just the advance messengers of something that would have happenned anyway.
