Tue, 27 Nov 2012, 1:09pm PST
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I will go one further. I think its plausible, that the housing bubble was malinvestment of the highest order. Peoples need for luxury was satiated, and this then reduced their impetus for improved education and work ethic. Why would you apply yourself to a science or useful degree - your going to get rich off your house. The decline in manufacturing paralled the increase in the bubble (due in part to entitlement thinking and due in part to NAFTA).
NAFTA and CRA were a dueling Malinvestment. Had we worked to keep key jobs, and had we not had a bubble, the US economy would have grown slower, steadier, and this whole bubble was avoidable.