A couple weeks ago, the Federal Reserve helped finance a buyout of the Bear Stearns investment bank, hoping to forestall the economic fallout that would result from its collapse.  This may leave average citizens wondering when the Fed is going to come to their rescue to help them with oversized debts and mortgage foreclosure.

But the truth is that while the financial decline is real, most homeowners don’t have subprime loans and don’t risk losing their homes.  The fangs of this credit crisis are more subtle than that, with a financial downturn causing the economy to lose jobs and making financial growth uncertain.  What the credit crisis has exposed is how reliant ordinary Americans are on transactions and financial institutions that operate beyond their reach.

We expect financial institutions to make smart, stable investments that will bring cash into the economy and grow our retirement accounts.  Yet even many economists don’t understand the tangle of subprime and high-risk loans that were bundled and sold across markets, a system of prospective profit that crashed after the bills came due.

The problem is that even people who make smart investments and manage their money well are paying the price of the high finance profiteers.  And Americans who are living paycheck to paycheck are going to have a tough time dealing with a credit constriction, in which it’s harder to get the loans for housing and education that we rely on to buy a piece of the American dream.  The credit crisis was a problem of poor regulation; we need a transparent system in which everyone’s stake in the economy is protected.

I couldn’t remember the first time I ever heard about the “American Dream” if I tried. As an American, it’s a concept that’s been ingrained in me since birth. It was reinforced when we memorized the pledge of allegiance in kindergarten with all that “liberty and justice for all”.

The “American Dream” is shorthand for all the United States is purported to stand for. A search of U.S. publications over the last seven days yielded several hundred mentions in reports on the mortgage crisis and the latest jobs report, immigration and healthcare, television and theater reviews, obituaries, and this article by Mary Hanna of the Tri-Valley Herald:

“The American Dream is to be able to attack at will, eat anything they please and vomit it up on people’s cars.”

When we say, “liberty and justice for all”, we mean it, even for the California buzzards Hanna was writing about.

More often references to The Dream is used to describe middle class life. Cynthia Tucker, summed it up in her nationally syndicated column:

“Tidy little houses… big shiny Chevrolets and Fords with bench seats… health insurance to pay for the occasional tonsillectomy or appendectomy… pensions generous enough to purchase nice gifts for the grandkids.”

The Dream also represents the chance to have those things. It’s the classic rags to riches story, recounted by Wendy Killeen in The Boston Globe:

“Phyllis LeBlanc, who attended college at night while working as a part-time candy dipper, is now owner, president, and CEO of Harbor Sweets in Salem, which sells goodies in stores all over the country and online. Based on her own life, she believes the American dream is attainable for everyone.”

It is the idea that humble beginnings are no impediment to greatness:

“A poor farm boy who grew up in rural Mississippi goes on to throw for more yards and touchdowns than anybody in history,” Mike Bianchi wrote of retiring Green Bay Packers quarterback Brett Farve in the Orlando Sentinel. “Maybe we love him so much because he embodied the American dream itself.”

It is the hope of transcending inequality, the hope some African Americans had when they moved out to Palm Springs, Calif. decades ago, before their homes were bulldozed for a new development:

“They came out here believing the American dream was out here in California,” said the Rev. Carl McPeters in The Desert Sun. ”They thought they left Jim Crow.”

The Dream is what has given the United States its reputation as the land of opportunity, and made it a nation of immigrants. Immigrants can even have the chance to become the next American Idol, as Sharon Fink of the St. Petersburg Times pointed out, describing Idol finalist Ramiele Malubay, who’s from Miramar, this way:

“a foreigner fighting to get a piece of the American Dream.”

And all of these themes are being invoked by reporters and politicians alike in the course of the current presidential campaign. Here’s Senator Patrick Leahy of Vermont using The Dream to endorse Senator Barack Obama, the black-immigrant-hick from Kansas-Kenya-Indonesia-Hawaii-Illinois:

“The American Dream is based on a belief that we can turn improbabilities into possibilities. Our nation is moving out of a troubled time in its history, and I believe the improbable campaign of Barack Obama offers just the sort of possibility our nation needs.”