Economy Strains Under Weight of ... Everything

Still the question stands: How far disconnected from reality are/were we that all of the sudden, what used to be known as the world economy dried up?

Economy Strains Under Weight of Unsold Items - washingtonpost.com: "The world is suddenly awash in almost everything: flat-panel televisions, bulldozers, Barbie dolls, strip malls, Burberry stores. Japan yesterday said its economy shrank at an 12.7 percent annual pace in the last three months of 2008 as global demand evaporated for Japanese cars and electronics. Business everywhere are scrambling to bring supply in line with demand."

Further to the point:

"What is it that we need more of?" Shedlock said. "Do we need more Wal-Marts, more Pizza Huts, more nail salons?"

Strip malls and stores proliferated alongside housing developments, but many of those houses are empty; there were never enough people to fill them in the first place, and there won't be anytime soon.

Harvard economist Edward Glaeser estimates that from 2002 to 2007, the country's housing stock increased by 8.65 million units, outpacing the number of new households, which increased only by 6.7 million over the same period. Taking into account a rise in the number of vacation homes, Glaeser estimates an overhang of about 1.3 million vacant units. Absorbing that excess, he said, could take an additional two years.

That last paragraph is the killer point. What kills me is the explicit effort to blame this entire thing on Fannie and Freddie - sure they greased the skids, but it looks like human nature ran this thing off the cliff.