This is a clear case of management's greed and stupidity, but the blame also lies with homeowners, who wanted bigger homes than they could afford, and were happy to overpay for them and over-borrow to finance them.
The sobering question that confronts us is whether any president, any administration, can stem the bleeding and put this nation back on the long and difficult path to competent governance, fiscal sanity and the rule of law.
The credit crisis that began in 2007 and triggered the current turmoil is unique in its ferocity, especially because so many large companies are experiencing unprecedented credit and liquidity problems.
"Every job lost on Wall Street impacts two-to-three jobs on the outside. By comparison, every job lost at an auto plant impacts nearly 10 jobs on the outside... We don't want to know what happens if the domestic auto industry gets away from us."
While the story of the big Wall Street banks teetering may be unique to the current downturn, the stories we hear of the Main Street credit squeeze could be cut and pasted from the 1990-1991 recession.
The Republican House plan would be a government bailout with the prospect that bank contributions would cover the costs over time. But those contributions will not come out of bank profits but will be passed on to consumers, further adding to the costs of credit.