Bubble or Reality: Who Pays When Asset Prices Crash?

When bubbles pop, the people who inflated them walk away rich. The people who believed in the system get left holding the bag.

The Big Beautiful Bill of death and destruction is working its way through Congress. Tariffs are taking a toll. Housing prices won’t budge. Things are tough all over. Trump ran on helping working-class Americans. He ran on factories, deals, and deportation of the criminal element among immigrants. Instead he’s raiding Home Depots, using tariffs to strangle American businesses, and fighting tooth and nail using all his political might to pass legislation that will cost lives and treasure. A handout to the wealthy and the ultra wealthy among many other horrid elements. Likely too it’ll hurt the economy.

Somebody's gonna pay when the music stops. The only question is who.

When Tesla was worth more than every other car company combined, when a 900 square-foot house in the middle of nowhere was going for $400,000, when people were taking out loans to buy cartoon monkey JPEGs - that wasn't prosperity. That was a bubble. And bubbles pop.

We've seen this before. Dot-com. Housing. Crypto. Now it's everything at once. Real estate. Stocks. Private equity. Even basic goods and services got financialized and inflated beyond recognition. A pickup truck costs $70,000. A college degree costs $200,000 and lands you a $17-an-hour job. A hospital stay can bankrupt a family with insurance.

But when the correction comes, the people who inflated the bubble don't pay the price. You do.

Working families get hit first. Pensions get raided. Mortgages go underwater. Layoffs start. Services get cut. The folks who profited most? They cash out, write off the losses, and get bailouts if things get really bad. You lose your house. They lose a line item on a balance sheet.

I watched this happen in 2008. My region was already getting hollowed out by NAFTA and CAFTA when the housing bubble hit. People who'd lost manufacturing jobs were told to get into real estate, construction, flipping houses. Easy money, they said. The American Dream, they said. Then the bottom fell out. The people who'd been selling mortgage-backed securities walked away rich. The people who believed them lost everything.

Here's your options now. Keep the bubble going - pump more money into markets, inflate prices further, pray wages catch up somehow. But they never do. That's how you get $70,000 pickup trucks and $50,000 college degrees that qualify you for jobs that don't pay enough to service the debt.

Let the bubble pop and suffer the fallout. That's what happened in 2008. The market "corrected." People lost homes, savings, years of their lives. Meanwhile, the banks that caused the crash got bailouts while homeowners got foreclosures.

Or do something radical. Deliberately grow into the bubble. Build housing until prices come down. Build industry until we're making things again instead of just trading them. Build transit so people don't need $70,000 trucks. Make things cheaper through production, not speculation.

But that requires public investment. A government willing to plan, build, hire. It means stop pretending the market is a god and treat it like what it is - a tool that needs direction. It means recognizing that asset bubbles aren't natural phenomena. They're the result of policies that prioritize financial returns over productive investment.

The finance sector went from 4% of GDP in 1970 to over 8% today. That growth didn't come from creating more value. It came from extracting more value from the stuff other people actually built. Wall Street figured out how to make money off money, while Main Street struggled to make money off making things.

Private equity firms bought up everything from nursing homes to newspaper chains, loaded them with debt, extracted every dollar they could, and let them collapse. They turned housing from shelter into an asset class. They turned healthcare from caring for people into maximizing shareholder value. They financialized everything and called it innovation.

Meanwhile, we stopped building. The Interstate Highway System took 35 years to complete 41,000 miles of road. Today it takes us 20 years to widen 10 miles of existing highway. China builds more infrastructure in five years than we've built in fifty. We lost the institutional knowledge of how to build big things and replaced it with the ability to inflate big bubbles.

The housing bubble didn't happen because we suddenly ran out of land. It happened because we stopped building housing and started treating existing housing as investment vehicles. We could build enough housing tomorrow to bring prices down, but that would hurt the people who own real estate as an investment. So instead we get more speculation and higher prices.

The education bubble didn't happen because knowledge became more valuable. It happened because we told everyone they needed a college degree while cutting public funding for higher education. Students got stuck with the bill through loans that can't be discharged in bankruptcy. The lenders made their money up front. The students are stuck paying forever.

The healthcare bubble didn't happen because we started getting better care. It happened because we let private equity and insurance companies insert themselves between patients and doctors, each taking their cut. Healthcare spending went from 5% of GDP in 1960 to nearly 20% today, but we don't live twice as long or stay twice as healthy.

We could deflate these bubbles by building alternatives. Public housing that competes with private landlords. Public education that doesn't saddle students with debt. Public healthcare that treats patients instead of profit margins. Public manufacturing that produces goods instead of financial instruments.

But that threatens the people who profit from scarcity. They want housing to be expensive so their real estate investments appreciate. They want education to be expensive so their student loan portfolios stay profitable. They want healthcare to be expensive so their insurance companies stay profitable.

The bubble economy works great if you own the assets. If you're working for wages, you're getting crushed by inflated prices on everything you need while your paycheck stays flat. If you're young, you're priced out of homeownership, buried in student debt, and told to be grateful for gig work that doesn't pay enough to cover rent.

Otherwise this ends how it always does: the people who caused the least mess get stuck cleaning it up. The people who inflated the bubble walk away rich. The people who believed in the system get left holding the bag.

When the crash comes, what sacrifice should the rich make? And if they won’t offer it willingly, what are we willing to demand?

But those choices don’t make themselves. They require political power. They require a movement with a mission - a mission to rebuild, to repeal this Big Beautiful Bill, and to hold accountable the crime syndicates masquerading as our leaders.

We need a strong opposition that speaks with courage and conviction. One that governs that way, organizes that way. We need leaders we would follow to the gates of hell because we trust them implicitly.

Because the alternative is what we’re seeing right now - working people getting crushed while the people who caused the mess walk away rich.

Corbin Trent