In particular, the first graph shows that the real cost of U. S. housing (factoring out inflation), after staying more or less level from 1950 to 1995 or so, then suddenly doubled in less than a decade, which is a hell of an pricing anamoly, and the final graph shows that subprime resets are about to get much worse, through the end of 2008, and even then will continue at about the current horrible level through the end of 2011.

IMO, this by no means implies any large-scale return of domestic manufacturing. The business climate for manufacturing in this country remains burdened with high social welfare costs (like Medicare), and costly regulatory burdens (OSHA, EPA, etc.)… none of which burden companies in Asia. Even if a lower dollar does manage to attract a few factories back to the U.S., the specialized support expertise that accompanies them have all but disappeared. It would require many years to redevelop this expertise again — another cost that most companies probably would not want to bear.

While capital is very portable, government and infrastructure is not. And while the regulatory and tax environment could be eliminated overnight by government fiat, the beneficiaries of such largess aren’t going anywhere. And they vote.

So I agree that this is bad, Tom, and I think it’s likely going to be much worse than most people believe. We, as a nation, have been eating our seed corn for 30 years. The silo’s practically empty. What will we “eat” next year? And the year after that?

And hey, at least the U.S. demand for Computer Scientists has picked up, lately, and somehow, that’s what I tend to care about the most. I’m kind of provincial that way.