Paul Krugman makes this point today in the NYT:
To be more specific: the severe housing slump we’re experiencing now will end eventually, but the immense Bush-era housing boom won’t be repeated. Consumers will eventually regain some of their confidence, but they won’t spend the way they did in 2005-2007, when many people were using their houses as ATMs, and the savings rate dropped nearly to zero.
Me: I cannot overemphasize the importance of reenergizing the stock market. Asset-based wealth will continue to be critical to our financial future. Policies must be vetted with that in mind.