Awwwww, shit! Here we go again. Cue the "Not this shit again" man!
As I've explained before, capitalism is unstable. It relies on human emotion and gut feelings of how they "feel" the economy is. If everybody
feels the economy sucks, the economy will tank and collapse. Stocks will drop to nothing. Companies who rely on those stocks will go under. The dollar will drop. The economies of the world will collapse as well.
That's not to say that this hasn't happened to some extent. However, the idea that the government is doing something, real or imagined, has slowed the progress of this freefall. It's an economic version of the Placebo effect.
Having said that, the bailout, like most bailouts, was still a good thing. If we hadn't bailed out the banks (at the very least), FDIC would had a worse effect than the bailout.
Think about it. A bank is the sum of its assets (customer accounts), and relies on taking that money and putting it in the stock market. Suddenly, the stocks drop like a brick
AND people start withdrawing money. Now, the bank doesn't have enough money to cover the withdrawls, and the intra-bank loan system isn't working because the bad debts are causing distrust among all of the other banks. Now, the bank has zero assets, but still has millions of accounts with $$$ on their computers. A bank with zero assets is one that no longer exists.
That's where FDIC kicks in. FDIC insurance covers the assets of every single account that is in a bank. FDIC covers up to $100K on a bank account. No bank will allow more than $100K on an account because of this. Thus, the FDIC covers THE ENTIRE BANK! Since the bank no longer exists, it's no longer just 'some' people that want to withdrawal. It's EVERY SINGLE ACCOUNT! Oh, and FDIC is a government insurance. Thus, the government has bailed out the bank the hard way by paying for 100% of its bank accounts, instead of providing a smaller loan to keep it afloat.
The bailout did what the intra-bank loans were supposed to do and provide enough money for them to pay for the withdrawals. By the way, the bailout is NOT free money. It is still a loan, including interest. The government has bailed out many industries and it has made money on them. This loan is no different.
As far as punishing the banks, yes, we would like to see them suffer, but ultimately, revenge would hurt us more than it would help us. It's a damn shame, but something we just have to put up with.
Louis wrote:I know it probably sounds crazy but I've had the flu for the better part of five days and I've done nothing but watch the News Mix channel on DirectTV. Its kind of like staying at a Holiday Inn Express. I'm now an expert in everything.
Actually, watching 24h news TV will rot your brain. It's scientifically known to give you brain cancer, and the cancer only takes about a few days grow into the size of a grapefruit. Sorry to be the one to give you the bad news...
People yell about how my taxes are going to go up and I'll be paying for this for years, and I'm like "I think you have me confused with somebody far, far more solvent." 
). Drove to the Kroger pharmacy (because for every two prescriptions you get filled you get 10 cents off per gallon on your next fill up!) and everything was ready for pick up.