AIG, which is the largest insurers in the US, failed this week. Requiring an $85 billion buyout from the government. We were both awestruck by that one just before bed. This prompted a very interesting conversation that had us both up very late.

First, when do we hit bottom? We've watched as so many companies have failed, so many jobs have been lost or shipped elsewhere.

How long before this gets better?


Unfortunately, there is no easy answer to that. The Mrs. kept wondering what we will see fail next. Is it retail? How many are holding on, hoping one good holiday season will keep them afloat another year? Is one of the Big Three next? When do we hit rock bottom? How bad will that be? There is really no way to tell.

The good news is that many companies have made or are making major changes in an attempt to weather this storm. The bad news, is that it takes time. Changes don't produce results overnight, and reputations do not heal instantly.

The next point of discussion, and this is a big one, is: Who is to blame? What is the reason for these economic woes? The Mrs. contends that it all boils down to personal responsibility. People have got to stop doing dumb with money and take responsibility for the consequences. They made the decision to take out the loans that they could not afford. They took out and ran up the credit cards. Consumers have made this mess.

I agree - in part. I can't argue that personal responsibility isn't severely absent in today's culture. But is that it?

I brought up the fast food / McDonald's culture we saw recently in Super Size Me (we're late to the party, I know). Is it the same thing? Is McD's to blame, or the people buying their crap food. They were free to make their choices. they could have brown bagged it. McD's is just selling a product, it's up to the consumer to say, "no thanks". McDonald's could sell healthier food, and encourage healthy living. But they don't. Consumers need to say no. Same with this mortgage mess, right?

No so much. It's no big secret that everything under the golden arches is over the top on salt, calories, and fat. Do people walk in expecting to find some thing healthy? The salads might still have a few fooled (the dressing kills that one). I think it's safe to say that pretty much everyone walking in there knows what they are getting.

Consumers: With the mortgage mess, this is not the case. A small percentage of folks were truly swindled. But that does not account for the majority of these foreclosures and lender failures. So what about the rest? Some knew they were doing something dumb or at least questionable. Personal responsibility, right? Some knew enough to know that they were taking on increased risk, and thought that... well... who knows what they were thinking. Maybe they weren't thinking at all. That's one piece of the pie.

Corporate: Another piece is the banks and lenders. What? They shouldn't sell their products? Going back to the McDonald's reference - Do they get harmed when you get fat? Do they suffer because of your diabetes? Does the adversity that their product causes have any affect on them? No. Little to none. When you default on your mortgage, that's a problem for the bank. They are going to lose money. They are going to end up owning a piece of property that they do not want. They are going to blow through big bucks in legal fees, lose out on interest, as well as principle. When you lose, they lose. Still they took on the increased risk. They chose to do business based on your FICO score and the max amount that you could "afford"(how's that workin' out for you, btw?).

On top of that, there are no myths about McDonald's food - at least not favorable ones. Your Uncle doesn't talk about good grease vs. bad grease. There aren't blog posts talking about all the medium Coke's you have to drink to qualify for a Big Mac. The lending industry is full of this crap. On top of that, your have realtors pushing clients into nothing down, ARM financing. Likely due to the kickback from the bank that they work with. It also helps them sell you more house, since you can "afford" more (you can't), thus boosting their commission check. Is that

Government: The last piece of this crap sandwich, is the government. They have turned a blind eye to an out-of-control industry and and storm that has been building for years. Alan Greenspan, former Chairman of the Federal Reserve Board and all around smart guy, warned of this impending doom years ago. Congress's action? Well, we're still waiting for it. Alan has since left the Fed and his replacement, Ben Bernake, has only succeeded in throwing money at the problem. Then again, encouraging stimulus checks and corporate buyouts is about all he can do. In the end, our do-nothing, wait-and-see government has allowed this stupidity to continue.

Who is to blame? Government, Corporations, or Consumers? I think the answer is, "yes".

Your thoughts?