You know your balloon will burst

With just a little bit of review, you can't help but be amazed at how entitled we seem to think we are. So much that we're more than willing to suspend common sense.

I find this particularly true economically. We seem to have insisted on believing that everything is wonderful and will always be wonderful. The reality is, sooner or later the bottom always had to drop out. We've been lucky for decades that the drop out was a singular industry with just a bit of blow back. The current Recession is really just when all our pretend came tumbling down as if the entire fairy tale book went up in flames at once.

In terms of personal experience, I guess I could go back to the early '80s and the savings and loan implosion. The falsity there was lending practices. To put it best, there's the story I watched personally. I was consulting for an entrepreneur/attorney who was also building an office tower. He needed some extra funds to finish the building and deal with some business ancillaries. We went over and visited the S&L with which he did business. He walked out with a $2 million check. He showed the note referencing the collateral as a motor home. It was worth less than $100,000.

I quit working with him and he continued down the road to the scenic area of Big Spring and the federal jail there. He just didn't seem to believe the gap between reality and his "opportunity" would ever end.

It was a similar situation in the tech boom a decade and a half later. Everyone crowed about innovation and entrepreneurship and opportunity. Seeing early companies which offered a service or product people could really use make some ridiculously rich, venture capitalist put together funds to invest in other companies and drive them to a point they could go public. Hoping to get in on the feast, regular people bought up the stocks. The original investors cashed in, the companies "paid off debt" and "invested in marketing."

But it had to go Humpty Dumpty on us for a simple reason - after the original surge, so many of these companies explored technologies or put together products no one wanted to buy. It was a Ponzi scheme of a great magnitude, except the books were much more open. There were seldom profits in the companies. But everyone wanted to get theirs before it all came tumbling down and just kept pouring it on.

So much of the current economic failure is blamed on the homebuilding and lending industries. But who couldn't see it coming with just some common sense? Maybe population is increasing, but not in the numbers homebuilders were churning out structures. It was misleading because there were buyers. But more importantly than the volume of homes being built was the size of the market which could actually pay up when the bills came due.

When that market was exhausted, in order to keep the ball rolling, loans were simply made to those who were destined to eventually find themselves unable to pay. Obviously seeing the pending Jericho, lenders packaged up such loans and sold them up the chain and up the chain. But it was inevitable and obvious. We just didn't want to see it. We were too busy getting ours.

Economics isn't really that difficult. You can throw around phrases like supply side and global marketplaces and obfuscate. But in the end, it's common sense. If you're not so wrapped up in your personal greed, you can easily see a bigger picture of success or failure.

It doesn't matter how much the pretty red balloon floats around. You keep inflating it, a pop is a certainty.