It's about feeling secure. 

That's what we're talking about in America when we talk about the financial/economic-meltdown/crisis we're currently experiencing here. 

Mainstreet (everyone in America making less than $250k-ish) feels insecure.  Consumer spending (i.e. you and me spending our money) is way down.  Banks (i.e. generally well off people behind corporate identities) feel insecure.  These security-issues in people inspire reactions.  The worst reaction would be a run on the banks like during the Great Depression.  Another fear is the how the stock market reacts as if it is a living breathing being. 

The Dow tumbles 382 points on news of the Obama Administration's plan to recover credit markets.  You can't really talk about our economic situation without talking about the balance sheets.  The balance sheets tally some-bodies ownership in the stuff we call our economy.  

Our economy is bad so the fix sounds something like "major reforms!"

"Major reform" is bland enough to mean nothing to most people.  Obama's administration now has the unenviable job of making "major reforms" mean something to the American people.  It's time to tap dance folks! 

A little soft shoe. 

Enter U.S. Treasury Secretary Timothy Geithner, the man with the plan.  Money doesn't mean anything anymore. He's planning to throw a trillion over here and 500 billion over there.  They're talking about "systemic risk regulators," "regulatory capital requirements" and "recessionary headwinds" when they speak about our economy. 

You and me. 
The consumer spender.

Why is "consumer spending" so important?  That takes us back to our feelings of security. 

You and me.
People.

Allen Salkin published a piece in the New York Times last Friday titled, "You Try to Live on 500K in This Town."  He got some public heat for the piece.  In the article, Salkin breaks down how much the lifestyle of a CEO in New York City costs.  Salkin's article responsed (in a sense) to the measures proposed by President Obama's Administration to cap executive pay for banks receiving federal welfare. 

On NPR, Salkin said he wasn't defending the cost associated with an executive lifestyle.  His intent was something closer to just reporting the lifestyle.  It must be his objective tone that made the piece read like a defense.  The point of Salkin's article seems to be that everyone in America is living paycheck to paycheck.  Even CEO's!  Nobody owns anything, including CEO's, and with this paycheck to paycheck situation already in full swing it would be difficult to ask even top executives to decrease the cost of their lifestyle.

With nannies, drivers, personal trainers, galas and dresses to think about; how can one possibly enroll their child into a private school?  The point here is not to attack the people who live these lifestyles, but rather to highlight their feelings of insecurity.  It's tough ya'll.  Even CEO's are insecure and the economy is suffering because of these feelings of insecurity in America. 

As the Obama Administration attempts to tackle the crisis of people not feeling secure, it might be good to remember a couple of key problems causing people to feel insecure.  Problems like "illiquid mortgage securities."  Part of the United States Treasury Department's solution to 'fix the economy' is "to encourage private investors to acquire illiquid mortgage securities..." 

Mortgage indicates something to do with the housing market. 
Securities then might indicate multiple mortgages bundled together as something for someone else to buy. 
Illiquid meaning nobody wants to buy these things anymore!

Nobody wants to buy them and I imagine this causes feelings of insecurity for the people who currently hold them.  Keep in mind they weren't born with these illiquid mortgage securities.  They bought them when they thought they were worth money.  (Just like millions of lottery tickets sold everyday in America.) 

The Treasury Department now wants to offer money in order to entice people to buy these things that nobody wants to buy anymore.  The Treasury Department is not just suggesting putting up a set amount of money though.  The Treasury Department is suggesting we do with the money their investing for us the same as the banks (which are in trouble I might add) do with their money.

Fractional reserve banking techniques. 

If you give me $10 to hold, I'll loan out $100 based on the $10 you just gave me.  Where did the $90 come from?  Don't worry about that let the fractional reserve banking gods take care of that part.  We just account for it on our balance sheets.  The fractional reserve banking method assumes everyone will pretty much leave their money in the bank.  Therefore the $90 is a sign of faith.  Faith as great as any other!  It's a faith that everyone will not want to withdraw their money at the same time.  If that happens, then we have a problem. 

That's called a run on the banks. 
Not good for our economic system! 

Most of the time, though, you might pull your money out only to give it to someone else who will put it back into another U.S Reserve bank.  The $90 created out of thin air is still secure as long as we feel secure about it and nobody is called to account for all the money on the balance sheets. 

Do you feel secure? 
Do you still want that endless paycheck to paycheck lifestyle exemplified by CEO's and executives in this country?

Buy a house and you have a place to stay safe in tough times.  Continually pay on a lease and you have another bill every month.  Buy a car and you have a certain degree of flexibility in your life.  Lease a car and tie yourself down to the paycheck you are currently earning when you signed that contract.

Where do feelings of security first begin? 

Fix that, and apparently, you fix the economy!

Do you feel secure?