Financial Literacy: When a Bank Collapses

There has been so much debate about bank bailouts, and most people have nothing more than uninformed, generalized opinions on the subject, usually based on personal philosophies about the proper role of government in our nation’s economy. Bernanke and the Fed have maintained that the bailout was absolutely necessary in order to stop the economy from charging over a cliff. Is this what really happened? Or are the big banks an informal extension of the government already, and the taxpayers are routinely called upon to bail them out due to their poor business judgments? And if the latter is true, then surely such government “protection” creates a moral hazard in that the banks know  no matter how foolhardy or careless they may be,  when push comes to shove their survival is assured, i.e.  Big Business always gets saved by Big Government! Exactly how did the banks, particularly the Big Banks, get in so much trouble? How exactly was this related to the real estate bubble? Get part of the picture in this short video: Financial Literacy: When a Bank Collapses at http://www.youtube.com/watch?v=oG0ry145ymc.

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