The escalation of home prices made it possible for people to take second mortgages (home equity loans) and use the money to pay for vacations and make purchases that in many cases were non-essential.  When the consumer spends money, revenues of companies go up and so do their stock prices.  However, there will come a time relatively soon, when the average person/consumer is going to have to quit spending.  The equity money is all gone, people are loosing their jobs and wages are not keeping up with inflation.  In the meantime, the price of gasoline rose by over 100%.  Eventually, this is all going to bring the country to its knees and we will experience financial disaster to companies and individuals more sever than during the period of the great depression. 

Many people have several credit cards, all accumulating debts they will never be able to pay off.  In addition to those attractive car loans that drove and still drives many people to purchase new cars and trade-in cars for cars they also could not and can not afford.  I see a situation where people will be driving one or both their vehicles to the nearest dealerships and parking them, because they are unable to make the monthly payments or because they are so far upside down (owing more than the vehicle is worth) and they are therefore unable to trade their vehicles in for a more affordable one.  The outcome of this scenario is another bail out or rescue (as a person who is totally not in touch with reality calls it-rescue) of an even greater magnitude than $700 billion.

Just as the mortgage companies/banks/greedy speculators and builders-with outrageously priced houses created a disaster that has now caused companies and individuals to lose more money than the profits that were made during the happy years, the automobile companies and credit card companies are to blame for their easy lending practices.  Practices that were designed to sell automobiles at any cause without taking into consideration that all good things eventually comes to an end, and here again the consumer would be left holding bag.  Practices were banks were/are extending credit and constantly raising credit lines.  It is just not possible for someone with a family, a mortgage and car payments, making $100,000 in annual salary to ever be able to pay off a $30,000 credit card debt (not too many people making that kind of money).  There are countless people out there owing much more than $30,000.  Still, even with the crisis at hand, credit card companies continue to send out offerings for credit cards with high credit limits; car companies are back to their game offering employee's incentives (you pay what we pay), - 0 - interest loans and no down payment. 

The housing industry made their money during this inflated housing boom by building more houses/more expensive houses than were really needed under normal conditions and that people could actually afford.  They satisfied the hunger of the speculators who were buying houses, not necessarily to live in, but to turn them around and make a quick buck.  Some of those speculators found out the hard way that what goes up at some point and time will eventually come down.  When the price of houses started to come down, the speculators were the first to foreclose and consequently home builders now and for many years into the future will be building houses to satisfy the normal demand for housing, pre-dating back to the greedy years.  Some of the home builders will go out of business and others will shrink their business and the price of the housing they build, in order to survive and stay in business.  It is no longer business as usual for the housing industry.    

When are they going to learn? What's going to take to change the way American Companies do business? 

The government is just at fault here as are the perpetrators of this financial crisis and the one coming right behind.  The economy is strong and the consumer is resilient.  Until the very last minute, those were the words coming from our government.  Then suddenly they woke up one morning to find out what every one else knew already, that they were dead wrong.  The failure of the government/politicians to protect the consumer and the American people from economic disaster is unquestionably the reason we are in this mess today.  When everything is perceived to be going wonderfully, the stock market up and companies reporting record revenues and earnings, the government fall asleep behind the wheel each and every time and they don’t bother to question anything until it is too late.  At the same time they are quick to take a great deal of credit for the falsely obtained good economic conditions of the country brought about by the shortsighted vision of American Businesses and the mostly unregulated financial creativity of Wall Street.  

We have a government that is reactive.  We have seen this time and time again, with each crisis, particularly during the past eight years.  In today’s environment and open markets, we need a government that is proactive and not one that reacts to events or tries to find the life jackets when the titanic is half way to the bottom of the ocean floor.  We need politicians that actually care about the people and not their own pockets; politicians with a sense of duty and service to country.  We need forward thinkers in office and not the outdated mentality of people who are out of touch with the lives of the average American worker and with society in general.  We need politicians who are able to stand up and fight for what’s right and fix what’s wrong.  The good of the country must come first and not the fear of losing an election or reelection or a “job” as some politicians put it before the bailout vote on 09/29/2008.  This is a date that will be remembered for many years to come.