Diane Swonk, chief economist for Chicago-based Mesirow Financial, compared the economic crisis to a financial "tsunami." But she said the responsibility goes beyond the economic elite, adding that people across all income strata are caught this year, "from the top CEOs ... to the individuals that thought they were buying a part of the American dream."
In an interview with Elizabeth Vargas, she said that "everybody wanted more than they could afford."
On the hot seat now are corporate leaders who made a profit in the midst of the crisis. "They were living so high on the hog, and they were so used to getting, you know, 10, 15, $20 million bonuses, and flying on private planes," Andy Sewer, managing editor at Fortune Magazine, said. "And, then, all of a sudden, the bottom fell out of these companies. It's a reckoning."
It has been a reckoning for former corporate CEOs like Fuld of Lehman Brothers, who faced down questions and cameras on Capitol Hill. "If you haven't discovered your role, you're the villain today," Rep. Tom Mica , R-Fla., told Fuld in one hearing on the causes and effects of the Lehman Brothers bankruptcy.
Former executives of the insurance giant AIG were also questioned. One topic of discussion: the fancy retreat hosted by AIG after an $85 billion bailout. "The committee has learned that a week after the bailout, executives from AIG's main U.S. life insurance subsidiary, AIG American General, held this week-long conference at an exclusive resort in California," said Rep. Elijah Cummings, D-Md. "They were getting their manicures, their facials, their pedicures and their massages while American people were footing the bill."
Also facing scrutiny are the bosses of the Big Three auto companies, caught by ABC's Brian Ross flying private jets to Washington to beg for bailout money. "It's almost like seeing a guy show up at the soup kitchen in high hat and tuxedo," said Rep. Gary Ackerman, D-N.Y.
But what about all the average Americans? Were they caught living too large? "The reality is everybody has been guilty in this economy," Swonk said. "Anyone who, you know, put something on a credit card that they couldn't afford, anyone who got that little bigger loan because they wanted a little bigger house."
Indeed, some homeowners this year have confessed that they were in over their heads. "I'm very ashamed that I accepted that mortgage," said Leah Talley, a Floridian who lost her home to foreclosure. "I shouldn't have done it."
Now that we've gone from boom to bust, Americans are finally forced to tighten their belts, even if their belts are diamond studded. "The bling is gone," Swonk said.
On the question of when the econony will bouce back, the "reality is, no matter what we do ... things are going to get worse before they get better," she said. "All we can do at this stage of the game is cushion how hard the landing is. We're still going to land hard and we're still falling."