Michael Mandel speaks kindly of the housing bubble over at his Economics Unbound blog:
In 2004 I wrote a book called Rational Exuberance. The main premise of the book was that the boom-bust pattern of the U.S. economy was actually an advantage. Back then I wrote: "During boom times, the U.S. is able to fund innovative and growing new businesses with financial instruments...that barely exist anywhere else. And then when the inevitable bust comes, the U.S. financial system is highly liquid and far more diversified than elsewhere, able to cope with sharp plunges without freezing up. For the U.S., the ability to direct resources to innovative new businesses sucks in new ideas and smart people from all over the world. That accelerates innovation, produces new jobs, and creates a competitive advantage that other countries cannot match, no matter how low their wages are." Well, it looks like the U.S. is about to test my 2004 assertion. Bets, anyone?