Do you ever wonder how things got so bad in the economy? The one nagging question I have is how nobody saw this coming? I can only come up with 2 answers: 1) Nobody cares about the future consequences as long as the massive profits are rolling in, and 2) They really are that stupid. Considering the stupid money the leaders of the failing companies are making/have made, I'm going with #1. I will concede that there was a perfect storm of sorts with the rise in oil prices coinciding nicely with the complete collapse of the housing market, but there's no way that the companies now being indirectly affected, like car companies, banks, etc. are shocked at the current situation.
It was only 8 years ago that the tech bubble burst; granted, it was a different scenario but venture capitalists lost a lot of money. Someone, somewhere had to see the insane rise of home prices and the amount of homes being built and say to themselves, "Wow, this could get ugly when it stops." Because it had to stop, it's the natural order of things. And when the market priced people out of buying, and the people who bought were totally screwed, everyone else seemed to be doing business as usual. I read this morning that GM has bankruptcy rumors circulating because their cash reserves are running out. GM! One of the largest automakers in the country! Because they chose to cater to the trend and roll out more and more uneconomical vehicles and then suddenly slapped their collective foreheads when people stopped buying them, they may be screwed.
That's the problem; everything that happens is reactive, not proactive. We legislate reactively, not to halt problems before they start but to keep them from getting worse once they've already begun. It seems to be the way businesses operate as well...as long as the bottom line is good, who cares right?
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