Not just local banks, large well run foreign banks (probably in the immediate future it would be Canadian banks) would have bought up large portions of the commercial/retail banking of these large poorly run American banks and to most Americans the transition would be seemless; with the (obvious) exception that may foreign banks (in particular Canadian banks) are much more conservitive in their lending practices and wouldn't be willing to give adjustable rate mortgages worth $300,000+ to the unemployed to buy homes to flip.

Probably. 

@ mrstickball:  So your problem is with the timing, rather than the occurrence, of bailouts? 

People seem to forget that a lot of small local banks also took on bad loans and have suffered because of it. Also, what happened to conservatives being protectionists?

You want foreign banks to own American ones? How does it sound to you if the Saudi government bought Bank of America?

Also, a lot of big foreign banks were linked to the crisis too such as UBS in Switzerland. Major Western European banks made low interest loans to people in Eastern Europe which will probably be where the next banking crisis comes from.

The perestroika firstly got the Soviet into a massive hole (as any reform as widereaching as it would) but within a decade they were (in general) far better off economically than before the perestroika. It allowed their economy to grow.

But the political system fell apart and Gorbachev lost power which led to the USSR falling apart into 15 Republics. Which was a good thing, but not that good for the Soviet Union as a unified nation.

A little bit of both.

The chain of events that were bad (from my research) is:

• Government backs loans of questionable reliability to lower income Americans thanks to CRA of 1999.
• Banks continue to act predatorily, using the fed backing
• SHTF
• Government reacts by hastily infusing the banks with $800 billion of TARP funds
• Some banks go under
• Others see huge profits, continue bad business as normal

My problem is that the enabler was the US government backing bad loans. 66% of all bad loans were through government-based securities, so I do believe the government shoulders most of the responsibility for the failure, as well as rectifying the situation.....Why would the government approve of something, then back out from taking care of the very banks they forced to issue predatory/questionable loans?

So because I think that the government may have had the right to help out (since it created the problem initially), it should have at least done it in such a way as to ensure the money was used efficently. But now we see that the money, like most other government initiatives, did not go entirely to the problem, losing taxpayers billions of dollars in expenditures and interest.

So again, your problem is that the government stepped in with poor timing and technique -- not that it stepped in -- to limit the destruction.

I wish it hadn't, but I understand why they stepped in. However, since they did it, I do have a problem with how they handled it as a lot of the funds were mis-managed and did not have the intended effect that they were designed for.

The USA doesn't need a pair of strikers, they barely even play football (soccer).

Except small local banks didn't take on bad loans and suffered because of it.  Not many anyway, because they were much more conservative in their lending polcies because they had to be... and because they couldn't afford to be in the loan securities swapping buisness.