Scary as the national economy is, last week’s failure of Washington Mutual shows just how much more sophisticated consumers have become since the Great Depression.

With Seattle-based WaMu’s collapse, the Pacific Northwest attains the unfortunate distinction of being home to the largest bank implosion in U.S. history. Decades ago this might have precipitated a full-scale run on our region’s banks and a destructive stock market panic. That it has not done so demonstrates that most people understand a stampede for the exits is in nobody’s best interest.

Is this confidence justified? At least in part, it is.

Deposit insurance now means bank failures aren’t likely to steal the life savings of ordinary citizens. This guarantee isn’t quite as ironclad as our government would have us believe. A few more giant bank collapses could put a heavy onus on Congress to keep the insurance fund solvent. But this assurance that our deposits are safe is about as solid as anything can be in this strange new world.

Regulators are now deeply involved in monitoring and treating the banking malaise. Unlike in the early 1930s when bank presidents could clean out the vault and skip town, the feds have been stalking WaMu for weeks. Seeing no positive end in sight, they seized WaMu’s remaining assets and arranged a shotgun wedding to J.P. Morgan of the viable pieces of WaMu’s corpse. All surviving banks are on a very short leash.

Unlike the 1920s and 30s, when lots of towns only had one bank, we still have banking options. WaMu customers can go elsewhere. WaMu’s mortgage clients will be seamlessly adopted by Morgan.

But there still are ample reasons to keep an eagle eye on the man behind the curtain. For one thing, this is the same government that permitted this crisis to erupt. Efforts to stuff the lava back into the volcano are being managed by people with little belief in strong regulation. These are people who in many cases openly hope for industry jobs when the Bush administration ends in a few short months.

There also is ample reason to be suspicious of moves that concentrate so much financial power in the hands of J.P. Morgan and a few other survivors of the crisis. Recent events are a dream come true for old-fashioned banking titans, the type of people loathed by President Theodore Roosevelt and a generation of anti-monopolists.

Congress began this week by balking at the proposed $700 billion financial bailout plan. As officials argued for a more tightly regulated solution, stocks tumbled and the world markets shook. The reaction underscored the need for the leadership to push on and forge a better solution – for the sake of the people they serve. But ultimately, preserving our financial well being also is up to each of us. In the modern age, this means not overreacting as individuals, but making very certain that our federal servants react appropriately.

One thing is clear, the next few weeks will severely test the survival of our good sense and trust.