I won’t pretend to know a lot about the semantics of the American economy (as was evidenced by my C in my grad level economics course), but anyone who’s paying attention can see that the banking industry isn’t doing so well lately.  One of the largest banks in the world, CitiGroup, has been laying off thousands of employees a year for multiple years now after claiming billions of dollars worth of loss in the last quarter of 2007.  This is just one example.  Anyone remember the scene in Mary Poppins when the kids caused a run on the bank and everyone demanded their money back because they didn’t feel like their money was safe?  I’m just about ready to go demand all my tuppence.

Last week the bank Washington Mutual went under and was bought out by JPMorgan Chase.  This hits a little close to home as I used to bank with WaMu for years.  I’m sure everyone who had money with them is still fine, but you can’t help but feel a little unsettled when the people handling your money have to openly admit that they can’t handle their own.

On top of that, it was announced yesterday that CitiGroup would be acquiring all the Wachovia branches and other areas having to do with their banking.  Wachovia as an entity will still exist due to the fact that they have dealings outside the banking industry, but it’s still intimidating to think that everyone who banks with them just got rolled over into another bank by no choice of their own.

Another example is that the Lehman Brothers bank was bought out by Barclays Capital.  This was really the beginning of the end if you look at it from a timeline point of view.  This destabilization started a ripple effect that we’re all feeling.  This started talks of a downward spiral that the government was contemplating stepping in to prevent, but that didn’t go quite according to plan.

Yesterday afternoon the House of Representatives rejected a $700 billion bailout plan and as a result the DOW plummetted a massive 777.88 points, the largest decrease in one day in the history of the stock market.  And as selfish as I’ll readily admit it was, my first thought was not for anyone but myself.  “What’s gonna happen to my 401k?” I thought.  I’ve been contributing for over a year and a half and have a nice chunk of money in it.  Nothing huge, but a sum I’m proud to say I set aside for my future without spending on something frivolous in the present.  However, due to stock market trends I’ve steadily lost money as I contributed, and have seen a decline of over $400 recently.  That’s not even taking into account the waves that have been created in the past 2 weeks.  I’m afraid to check my 401k today to see where it’s at.

I’m trying to remain optimistic though.  It can’t last forever, right?  I don’t believe for a second that the American economy will completely crumble and that I’ll be foraging for food in the wilderness within the year.  I’ve heard arguments both for and against the idea that we’re entering another era of Great Depression.  I can’t say whether or not I think this is true because I honestly just don’t know enough about happened the first time around.  But after all that’s gone on recently, it may be time for a little history review.