For the latter portion of the 20th century many Americans sought to perpetually generate wealth from their homes. Home ownership, which was once considered a consumer durable, turned into an investment opportunity. Families and independent investors would buy homes, wait for the inevitable increase in value, and then flip the house for a profit. Americans learned to expect rising housing prices, viewing the enormous and rapid gains as a natural economic trend. In the minds of many, the housing market provided a risk-free investment opportunity and an alternative to low-rate savings. Unfortunately, the rationale that led to the housing bubble has sparked the worst recession since the Great Depression. The era of investment housing in America has ended, and the bubble that was created from these practices has busted. Homeowners will never again witness wealth generation from their houses.

Economists and policy-makers were not immune to this rationale. All but a very few touted our ill-conceived bubble economy, citing the housing market as a source of never-ending wealth creation that would fuel our economy and provide a source of investment for the average American. Through “brilliant” economic policy, lax lending restrictions and a reduction in banking regulations, our economy had succeeded in creating an unstoppable boom.

A basic economic tenant is that with every boom must come a bust. Artificial booms create unnaturally large busts. Elevated by poor monetary policy, the housing bubble was primarily fueled by government policy partially intended to encourage home ownership among the less fortunate. Specifically, the Community Reinvestment Act (CRA), lax regulation, inappropriate business practices and, an often-overlooked aspect, the Greenspan Put caused the current crisis.

“The more fundamental way in which the Fed contributed to the bubble was via the Greenspan Put, namely, the assurances the Fed gave markets that, whatever might happen, the Fed had both the ability and the willingness to clean the mess up afterwards, without too much pain,” said Jeffrey Miron, Harvard professor and former chairman of the Department of Economics at Boston University. “This stance played a major role in Wall Street’s excessive risk-taking.”

Never again will home ownership yield returns like those enjoyed in the second half of the 20th century.

“There is no iron law that real estate must appreciate,” said Stan Humphries, chief economist for the real estate site Zillow, according to the NYTimes. “All those theories advanced during the boom about why housing is special — that more people are choosing to spend more on housing, that more people are moving to the coasts, that we were running out of usable land — didn’t hold up.”

The New York Times reports that in an annual survey conducted by economists Robert J. Shiller and Karl E. Case, hundreds of new home owners in four communities — Alameda County near San Francisco, Boston, Orange County south of Los Angeles, and Milwaukee —once again said they believed prices would rise about 10 percent a year for the next decade.

“People think it’s a law of nature,” Shiller said.

Americans must learn what false growth looks like and be able to distinguish from actual wealth and the illusion of wealth. Without a strong manufacturing base producing actual wealth and growth, our country will continue to “function” under dangerous bubble economics. Our trade deficit will continue to grow, our debt will continue to increase, unemployment will never dwindle and incomes will remain stagnate or continue to reduce.

America needs production. The backbone of our economy was once based on production and innovation. With its return our country can and will emerge as a global economic contender once more. Without a nationwide reimplementation of a domestic manufacturing industry our country, whose pride and wealth was once fueled by a booming and innovative economy, will continue to fade away.

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