Main Street owns Wall Street, believe it or not

— -- Q: People keep talking about Wall Street and Main Street. But aren't they closely related since many people own stock in a 401(k)?

A: Taxpayers have been understandably upset about the unprecedented government actions to backstop the U.S. financial system.

Risk taken by large banks and brokerages that bordered on recklessness has caused the government to step in and calm down the markets using our money. Taxpayers are peeved about having to step in and bail out huge financial institutions, which are supposed to be responsible stewards of our savings and investments.

That said, it's important to remember how interconnected we are to the financial system and why it's important to keep it working. Nearly 45% of U.S. households owned mutual funds in 2007, that's 51 million households, according to the latest data from the Investment Company Institute. That's up from less than 6% in 1980, the ICI says.

Some 88 million individual investors own mutual funds, and together they own 86% of mutual fund assets, ICI says. And those households own, on average, $100,000 in mutual funds. At left is a chart showing how the percentage of households owning mutual funds has soared.

And this is key fact, because it shows how regular people and their retirement accounts and college savings plans are tied to the financial system. That helps explain why government is working to preserve the system despite its problems, which need to be reformed.

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies. He answers a different reader question every weekday in his Ask Matt column at To submit a question, e-mail Matt at Click here to see previous Ask Matt columns.