I don't know that I see much to criticize. Stepping back from the current crisis and looking at the economy in general, cheap consumer credit has become inextricably woven into the functioning of the economy...and I'm not so sure that that's a good thing. Look what happens when it dries up. It's a choke point, a single-point-of-failure.

Easy access to mortgage credit was the first wave of the phenomenon, going back to the 1930s. Second wave was the development of the credit card in the 1950s by Western Union, and its "perfection" as a product used by everybody by Bank of America in the 1960s ("Bancamericard" became "Visa"). (Forgive the lecture, but in the late '90s I was a consultant to Visa and helped write an online history of the credit card industry. Can't help myself.) Credit cards were a big success in the marketplace--by the 1970s most people had at least one, by 1998 the CC industry was mailing out billions of credit card offers each year in North America alone...several for each man, woman, and child.

So we take consumer credit for granted, but maybe we should examine whether it's really all that healthy. It boosted consumer purchasing for many decades, and fueled a huge expansion of the economy (and trillions of dollars of business profits). But maybe that was another kind of bubble, and this is what it looks like when the consumer credit bubble pops and takes the whole economy with it.

We also learned to take inflation for granted (funny the correlation, eh?), but we shouldn't ignore the lesson: The value of a dollar is a relative thing. A house is a house whether it costs $50,000, as they did back around 1970, or a $million today. What's the actual difference?

Paper wealth? What a bunch of suckers we've been. Yeah, let's tear down the McMansions and build four more modest houses on the same lot. Or hell, apartment buildings. I live in an apartment, and most of the time I feel like I've beat the system. The owner and his manager have to worry about upkeep, not me, and my rent is much smaller than any mortgage payment around here. The roof keeps the rain off my head just as well as a million dollar cracker box.

You're not wrong. I fear you may be all too right.