Average American's Stake In The Bailout

"Will someone please explain to me what exactly would have happened to the average American if those huge thieving banks had gone under?"

It's hard to define the category of 'average American', but I'll try and work with it.

If the FDIC fulfilled its mission and protected depositors, no one who had savings on the commercial side of those banks would have been wiped out.

If the 'average American' had mutual funds or 401K's that were loaded with banking stocks and financial stocks, he would have lost money near term.

If the 'average American' bought banking or financial shares directly, he would have lost more, depending on how many of the banks were allowed to fail and how many were merged into other institutions. There is a risk involved in investing. The bailout was geared to protect the shareholders of the banks and insulate them from the consequences of the bank's fraudulent mortgage con and derivatives plays, and I don't think 'shareholder danger' warrants government rescue.

Were the shares of some of the largest banks allowed to go belly up, the markets would have reacted horribly, and international capital would have fled the country. The banking cartel would have been furious if they failed to extort the taxpayer bailout, and they would have thrown a fit of pique that would have thrown the markets into turmoil. Everything that is rigged can be un-rigged. They hold the levers.

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