For those who have found it difficult to follow the recent economic pseudo-collapse (such, admittedly, as myself), allow me to briefly sum things up in a succinct and simple manner:

The U.S. banking industry exploded.

It started Sunday night, with high-profile banking (and various other financial services) firm Lehman Brothers filing for Chapter 11 bankruptcy, marking the single largest (and possibly most terrifying) bankruptcy filing in American history.

It came following a year of losses due to something called the “subprime mortgage crisis” – basically, Americans took on subprime adjustable rate mortgages with extremely high interest rates with hopes that the housing economy would improve, making their rates more affordable. Unfortunately, these rates only increased, leading to large numbers of defaults and foreclosures, reaping losses for America’s major banks to the tune of approximately $435 billion. Yes, billion. With a “B”.

Anyway, back to the events at hand -- so, Lehman Brothers goes bankrupt. Monday morning, their stocks see an unsurprising, cataclysmic drop. Perhaps due to fear and insecurity in the entire banking institution, another U.S. bank saw huge losses as well, Merrill Lynch. Their plummeting stocks eventually led to a buyout by fellow financial institution, Bank of America. The Dow Jones average, as a result, took it in the pants, falling 504 points by the time the stock market closed Monday. (For those unknowledgeable about matters bear-and-bull, that’s a lot of points.)

American International Group (AIG), the world’s largest insurance company, ended the day at $4.61 a share, a one-day decrease of nearly 61 percent. Fearing a fate similar to Lehman Brothers, AIG requested a short-term investment from the federal government. Their wish was granted, and the federal government loaned the company $85 billion, receiving an 80 percent stake in the company in return.

Reaction to this government bailout has been mixed – see, that money didn’t come from a giant glass jar in the national treasury, a piece of masking tape crudely attached, warning, “Break open only in case of banking industry doomsday”. Those eight-hundred-and-fifty-million Benjamins came out of taxpayer’s pockets. That’s right, you helped save AIG. Give yourself a pat on the back, you altruistic so-and-so.

One detractor of the AIG bailout was Kentucky senator Jim Bunning, who disagreed with the government’s nationalization of the insurance giant.

“To say I am outraged by this would be an understatement,” Bunning said in a statement Wednesday. “The greed on Wall Street is only exceeded by the stupidity of the Treasury secretary and the chairman of the Federal Reserve.” Burn.

You’re probably wondering how this stock market catastrophe affects you – unless, of course, you were an investor in one of these financial organizations. In that case, I’d wager that you’re fairly certain how it affects you.

For the non-investing Mountaineer, however, it still has its effects – first and foremost, it has cemented the economy as the main issue during this election. Both Sen. McCain and Sen. Obama have made the economy their primary campaign concern since the stock market turmoil.

Sen. Obama has used the AIG bailout as further evidence of President Bush’s “failed economic policy”, saying that the federal government should place a stronger emphasis on “[bolstering] our economy's ability to create good-paying jobs” and “[ensuring] that the plan protects the families that count on insurance” instead of helping out the shareholders and higher-ups of AIG.

Sen. McCain called for the firing of Securities and Exchange Commission Chairman Christopher Cox, and proposed a trust to watch after financial institutions, strengthening the weaker ones before they reach rock-bottom, as AIG, Merrill Lynch, and Lehman Brothers did earlier this week.

The stock plummet had a more direct effect on West Virginians – in addition to a number of independent investors, the West Virginia Investment Management Board, which manages the pension plan investments of more than 100,000 state employees, had placed a number of substantial investments in the three failing companies. It may not mean that 100,000 West Virginians now find themselves sans retirement plan, but it may hurt their final retirement totals.

More unsettling than the actual fiscal losses suffered by West Virginians, and all American investors for that matter, is the unparalleled shaking of our faith in the banking industry. Perhaps this ideology is justified – if no solution to the subprime mortgage crisis is found soon, our nation’s money-handlers could find themselves having additional weeks even more unpleasant than these past seven days.

Even though the Dow Jones has more or less returned to normal, this loss of faith could prove irreversible. Expect to hear more about it from the two presidential contenders as we continue along the road to Election Day.