ABC News’ Betsy Stark reports: Listening to the MBA president trying to explain the roots of the financial crisis last night, it was easy to imagine why Americans are so reluctant to sign on to this $700 billion bailout. It's not just that they resent having to rescue Wall Street fat cats who have been living the high life while they struggled to fill their gas tanks and send their kids to college, it's that most of them have no idea -- in economic terms -- what this crisis is all about.
Most Americans understand the stock market -- a little. We show them pictures of the trading floor of the New York Stock Exchange and half the population is invested directly or indirectly in stocks. They know, in rough terms, that the value of their nest eggs goes up and down with the Dow.
But it starts to get a little fuzzy after that. The financial literacy problem in this country is well-documented. Many Americans with 401ks couldn't tell you what's in them and, despite the lesson of Enron,that diversification is the first rule of investing. It's safe to say lots of hardworking Lehman Brothers, Bear Stearns and AIG employees probably lost their life savings when those companies became part of the carnage of this crisis.
We've been told and we've been reporting that frozen credit markets are at the heart of this crisis. But even a lot of smart people don't have the foggiest idea what these invisible markets do for the economy, even when they are not frozen. We've offered various metaphors -- "the plumbing of the economy" and "the circulatory system" -- and Fed Chairman Ben Bernanke has tried his best in Congress over the last couple of days to explain what happens when the plumbing and the circulation fail. But it wasn't quite adding up to a $700 billion bailout -- until, perhaps, last night.
Even if ordinary Americans are still not able to connect the dots of how the malfunctioning of markets they can't see or understand has morphed into a crisis of epic proportions, they are getting the message about where this all could lead if Congress doesn't cut a deal: Stocks will tank, nest eggs will crumble, retirement dreams will disappear, lending will halt, people will not be able to buy houses, home prices will fall some more, foreclosures will rise some more, consumers will hunker down, corporate profits will sink, jobs will be lost … and those are consequences everyone can understand.