If Chrysler or GM go under, a lot of people would lose their jobs. But the effect on the rest of us wouldn't be dramatic; we'd just go buy our cars from Ford, Toyota, Honda, Nissan, VW, and so on.

Nope. The effect is not the same. FORD and GM do not make Burgers, something that you can eat and forget. They make cars: that involves servicing, warranty claims, repairs and recalls.

The main reason FORD and GM cars are not being bought enough is because people fear about warranties. What will happen to the warranties and servicing if GM is bankrupt tomorrow?

It doesn't work like that for banks, and that's why they're being treated as a special case.

Again NOPE. If banks die, the FDIC steps and repays each individual depositor upto $250,000 from its pocket. It is true companies and small business accounts are screwed, but the man on the street, the guy who earns drives a truck, pushes papers, stacks shelves, does accounting, get his money back in FULL.

It is also true that banks create money out of thin air and that their collapse will trigger calling in of loans and credit which will suck money out of businesses. Very True.

But when taken over by Government, they can stay afloat and continue to close gracefully instead of ugly. Like many Indian banks have been done and swedish banks did (if you are racist and think all asia is dirt poor).

Now, there's plenty of room to quibble about the way banks are being rescued, but there are pretty solid grounds that it's much more important to keep banks running smoothly than the car industry.

Nope. When an auto company goes bankrupt it affects many more people than its 50,000 employees. It makes suppliers of spare parts go bankrupt, car dealers to close, municipalities to lose revenue from taxes, telecom companies to lose revenue from lines, power companies to lose revenue from shutting down plants, and schools to shut down when children move out of areas.

When banks shut down, many other financial institutions are affected (other banks and insurance companies). But its closure affects its employees only. Banks don't pay any local taxes most of the time, so the local county doesn't care. They also don't have suppliers except for coffee and juice, so they are OK, and the only ones affected are the other banks with whom they have a fraternal relationship. They suffer a lot.

But since they are insured for all kinds of possibilities, they too will be good.

Your post clearly marks you out as a man of the fat cats.

Go over to FOX news. O'Reilly really wants you...

1. Market forces favour the consolidation of businesses because it imparts efficiency and economies of scale. Result? Big Corporations.

No. Markets love competition. CEOs don't. Competition makes the markets perfect. Competition lowers prices, so CEOs hate it.

2. The American Constitution protects the right to make donations to your favourite causes, even if you are a commercial entity only seeking to safeguard your interests. And guess what, they have more disposable income. Result? Big Corporations own politicians, if not by campaign contributions, then by threats to make massive layoffs in key districts.

Andrew Jackson broke the Bank. If he could do so, today's continental-nickel-president could do the same.

3. Bubbles will always happen. It is human nature to allow optimism to triumph over experience. We are hardwired to believe that it may just be possible to make money out of nothing. Case in point, at its peak the entire derivatives market was larger than the combined GDP of the whole world by several orders of magnitude.

Bubbles were not the case in the pre-Paper money era. The Gold standard brought some of the most stable economies of all time. The Fed didn't interfere in 1929 depression.

4. Wall Street knows that faced with the prospect of a banking collapse, the Government will blink first. Sure they'll whine and moan and threaten to claw back bonuses, but ultimately they will cave. Why? Because they know that an economy running on cheap credit is the only game in town. Americans live far beyond their means, thats a fact. For that, you need banks with healthy balance sheets doing what they do best - making something out of nothing.

The Government does not blink because of fear. It blinks because it is OWNED by wall street. Americans living beyond their means??? Pleeeaseee... If banks did NOT extend credit to every tom, dick and harry, there would no living beyond means. As you said greed is human nature. People do expect cheap or free credit to live beyond their means. The banks, as repositories of public money have to ration this credit. Economics 101.

5. By a massive stroke of luck, the US$ is the world's reserve currency, so the faucet of cheap credit remains open. But wait a minute, you say, banks arent lending now, so whaddaya mean cheap credit.

Not luck. By Design. 1944 Bretton Woods Conference. In addition the dollar is backed by "regime changining" military force that no other nation can afford. It is a case of the biggest bully backed by biggest club who forces every one to "donate" their lunch money to him.

In short, the Government (and by extension the voting public) have no stomach for the kind of wrenching reform needed to get this country back on track. My advice to you? Wait for the economy to recover a little, get in on the game to make a little nest egg for yourself, then cash out and move to a foreign country before point 5 above kicks in. Better hurry though, Wall Stree execs already have a 2 decades head start on you and there are only so many places left on the lifeboats. Consider yourself warned.

Good.