Imagine, for a moment, that you’re deeply in debt (I know that’s a big stretch for most of you).  You’ trying to deal with a bill for $1,000 and you’ve got no money to pay it.

Your son has just thrown a quarter in a fountain.  A quarter!  Like you can afford that.

You berate him, condemn him, and do everything you can to make him feel sub-human.  For  days.  Your wife cheers you on, reminding you of your financial trouble and how horribly irresponsible the kid has been.  She comes up with a new rule – he’ll have to give back 90% of his allowance.  You agree this is a just and fair punishment.  She calls a press conference to condemn the child, and riles up the neighbors.  She goes on a late night talk show and incites more bile against this horribly irresponsible kid.  You join in, of course. You’re so caught up screaming at the kid you completely forget one little thing: Your wife generated the original bill.

This economic meltdown was created by the government.  It started with Jimmy Carter’s Community Reinvestment Act, which required that banks hand out loans to low income people buying crappy property.  Banks responded and adjusted, and some even managed to turn it into a modest profit center.

Clinton put the program on steroids.  He demanded the act be expanded, and made it much easier for groups like ACORN to harass banks that didn’t comply.  He commanded Fannie and Freddie to increase the number of sub-prime loans that they handed out or insured.  Bush added more fuel to the fire by upping Fannie/Freddie’s requirements.

In order to comply banks, mortgage companies and lending institutions started handing out loans to anyone who could fog a mirror.  The prices of homes skyrocketed as more and more mouth-breathers bought property they’d never be able to pay off.

Companies like AIG used the mess to create flaky financial instruments that no one really understood  and sell them to banks all over the world.  Credit rating companies helped by giving them triple A ratings.  And everyone was happy, buying and selling and counting their profits.  It was a ghetto garage sale, where everyone got rich selling their broken radios and frayed clothes  to each other.

Of course it came crashing down.  It had to.  And yes, AIG and all the other participants contributed greatly to the mess.  But it never would have happened if the government had let business make loans using time-tested principles for calculating risk.  There wouldn’t have been enough sub-prime mortgages to create this mess if it weren’t for our past presidents and congress’ insisting that home ownership was far more important than sound business principles.

Yes, I’m pissed at the bonuses too.  They’re wrong and they’re stupid.  But compared to the trillions we’ve spent trying to fix this, screaming at AIG is like beating up a drunken frat boy for pissing into a poorly constructed New Orleans levy, blaming him for causing the flood, and ignoring the real culprits – the ones who undermined the levy in the first place.