It is probably too obvious to suggest that when markets are rising, investors are less bothered about how the company is making money. Of more concern is that it continues to make money.

But when the economy starts to take a downward turn, and companies follow it, then investors start to look for answers. Along with that comes the need to blame someone.

And finally there is the demand for compensation.

Lost among all of this is the notion of common sense. And naturally it doesn’t help when the nation is being raised to embrace a ’safety net’ or ‘bail-out’ culture.

Over the weekend we read the story in the Australian Financial Review that highlighted how ‘Generation Y’ was about to receive its first ever taxpayer funded handout. What a glorious moment for celebration that is!

The story regaled us with how Generation Y had previously relied on the Bank of Baby Boomer to finance its consumerist lifestyle. How they didn’t need to go to a bank because the Bank of BB would lend on very flexible terms – zero interest and no minimum monthly repayments.

In fact, if you were lucky, the Bank of BB would even write-off the debt completely in return for washing the car or pulling up weeds in the garden.

Now Generation Y is facing the new reality. That the Bank of BB is branching out. Or rather that someone else has set up in competition. And even better than that, this new system doesn’t even require you to wash their car, weed their garden, or even pay them a grudging visit at the weekend.

However, where does it all stop? Where is the line that says you have to accept personal responsibility for your actions?

The collapse of Storm Financial is another classic case. As you may have read in the press, Storm Financial was a Queensland based financial planning firm that promoted to its clients the strategy of borrowing against their homes and then buying into the stock market.

Naturally it all worked swimmingly while the market was rising. “Stay out of my business” the clients would have told anyone who felt like pointing out the potential dangers.

“We know what we’re doing…” And so it went on. Now that the world has fallen down around them and they face financial ruin they are quick to form a pressure group and line up at the door of ASIC to claim compensation and to demand why ASIC didn’t “do something” about it.

And given the current bail-out environment you have to say that they have a case for a hand-out. Afterall, what is the difference between an investor being given back $100,000 after making irrational and irresponsible investment choices, and businesses being given $20 billion as compensation against them having made irrational and irresponsible investment choices?

There is little difference. Yet the precedent has been set. Once you hand out cash to one group, the arguments against giving handouts to other groups becomes a lot harder to maintain.

More government backed handouts are likely to be on the way in the coming months.