Buzzworth,
That's actually the problem.
The Big Three paid too much attention to the "in the moment" type auto and not enough to everywhere else. They didn't hedge their bet.
Markets and consumers fluctuate, but there are always a few underlying "blue chips" that are safer bets. In the auto industry, those blue chips are inexpensive, fuel efficient, well-built autos.
The Japanese brands have been making inexpensive, fuel efficient, well-built autos since they were founded. This is their bread and butter. The market has come and gone away from them, but they continue to build what they know what to build. Because of this, they have enough money to invest in higher-risk autos, the SUVs, trucks, and sports cars of the world.
Meanwhile, the Big Three have nearly always been very reactive to the market, trying to score the quick dollar and not preparing for the future. Back when Henry Ford first put a V8 in a regular consumer car, it didn't take long for the Big Three (plus a few more, then) to realize that is what is selling, so now everything has a V8 in it. The fuel efficient, well-built, well-built cars like the Model T were abandoned.
This trend eventually evolved into the jet/space styling of the '50s, and suddenly every car had wings, vents, baubles, and do-dads. Continuing into the muscle car era, but by the early '60s, the domestics were creating small, fuel-efficient, well-built cars, just that there wasn't much emphasis put in them, and nearly all of them could be had with a V8 (which means the cars were re/engineered to be able to accept a V8, thus making sacrifices at being a true 'economy' car). We all know what happens next, the insurance/emissions/fuel crisis.
What were the Japanese brands doing this whole time? Making small, fuel-efficient, well-built, inexpensive autos. The market fell out from the land yachts and into the hands of the Japanese. The Domestics respond, poorly by many regards, and are suddenly left playing catch-up. This trend continues into the early '90s when the SUV and truck market exploded. So what do the Domestics do? Invest heavily into the new land yachts, and all but abandon the small car market. The money that could've, nay, should've, been used to improve small cars was instead used on land yachts. No cookie for guessing what happens next....the market collapses on the SUV and trucks, and the Big Three are left with not enough quality products to bolster them.
What have the Japanese been doing this whole time? Building fuel-efficient, well-built, inexpensive autos. The market has once again returned to them.
While building a product that is in high demand NOW is a good way to make a quick buck, when that market turns, you have better have a sure-fire bullet in the barrel or risk a quick death. By building a sure-fire product all the time, the Japanese brands have the money to sit back, watch the trends, then enter into the market with a product that could make them even more cash...without bailing on the type of car that got them there.
The solution is simple, the Big Three need to make, and continue to make, autos that will always sell, fuel-efficient, well-built, inexpensive cars, but with an eye to the future. They need to be less concerned about making the quick buck; stop following the trend with both feet. Don't jump out of an airplane unless you know your parachute is packed properly, otherwise you'll crash and not be able to get back up. The Japanese have great parachutes, while the Big Three don't.
You can't blame the consumer, you can't blame the government, the blame, if you want to call it that, lies with each automaker themselves.
