A good friend of mine accused CIVITAS of being "fact free" the other day, which I guess is fair enough. What that means for you, dear reader, is a game of catch-up.

Here are some facts.

According to Goldman Sachs, the United States' decade-and-a-half home construction boom has resulted in a surplus of one-and-a-half-million excess homes.

In other words, the housing industry's frantic suburban game of musical chairs, begun during the last Bush presidency, had gone into classic overshoot.

Every beginning is something else's end, and the beginning that comes out of the end of overshoot is collapse. Of course, financial markets don't like to use the word collapse, it sounds scary, so they don't use it. They use the much nicer word, "bubble."

It's a word you've seen bandied about the headlines. "Is there a real-estate bubble in your future?" "Will the real-estate bubble burst?" "The top five markets to invest in, if you want to avoid the real-estate bubble."

I want to talk a little about how we got here. Remember that beginning of the last Bush presidency thing? Well the housing bubble wasn't the only thing that started back then.

The other thing that started was the wholesale dismantling of the United States' manufacturing base. Well, that's not really true, the dismantling began in the 1960s. But it wasn't until the mid 80s, with passage of things like the General Agreement on Trade and Tariffs (GATT), NAFTA's precursor, that things really began to roll.

And rolled out the American middle and lower classes. As the most recent CIA (yes, that CIA) World Factbook's entry on the United States puts it: "Since 1975, practically all the gains in household income have gone to the top 20 percent of households."

New economy, new jobs

Not bad, except that an economy hard wired for growth needs consumers to feed that growth. The top 20 percent doesn't stay on top unless there's a consumer class purchasing products tied to the top 20 percent's portfolios.

But we've shipped the consumer classes' jobs overseas. So what do we do?

We turbocharge the one remaining U.S. domestic industry. We turbocharge the making of suburban sprawl. Building houses was the one industry that couldn't be moved to China and, so long as we kept pointlessly building McMansions and snout houses, so long as we kept building sprawl, people could be kept working.

Which meant they could be kept consuming.

Turbocharging sprawl meant making the cash needed to buy sprawl readily available. But how does a tapped-out middle class get the cash to put down? The money shot came bundled in a collection of creative new home financing options, everything from adjustable rate mortgages to the mother of all leverage, the interest-only mortgage.

Oh, that and sub-prime lending. You know, the practice of lending money to people who really shouldn't be borrowing money in the first place.

As a result, a lot of houses got built. And a lot of people who couldn't really afford to keep them were nevertheless encouraged and enabled to buy them.

And the economy chugged on, the landscape transformed into a vinyl-covered wasteland, the 20 percent got richer, and the rest of the country got farther into hock.

For whom the bell tolls

Overshoot, as I said before. It's fundamentally unsustainable, and it's coming home to roost. This week the Wall Street Journal reported that, due to a skyrocketing mortgage default rate, the huge British bank HSBC, which had invested deeply in sub-prime U.S. mortgages and other financial housing shell games, was about to lose two billion bucks.

And Toll Brothers, the nation's leading McMansion makers, just released dismal financial results. Where just a month ago Toll had declared the real-estate bust "over," this month they had to say, "Umm, we guess not."

It sounds bad, and it is. Building endless tract homes was supposed to rescue us from not building anything else. Now that, too, has come to a screeching halt.

For those about to foreclose, we salute you.

"As interest rates rise, more homeowners are falling into foreclosure'" the Journal reported on Feb. 10. "That is what is prompting the wave of bargain-hunting investors now descending on courthouse auctions across the country."

Every new beginning comes from some other beginning's end. A new legion of "bargain-hunting investors," buying and selling foreclosed properties is on the rise. And there's no reason that, just because you're being foreclosed on, that you can't also flip your neighbor's house down the street. You just need a little help.

I have a proposal. We attack the challenges of the new-new economy on another front. And toward that, here's what Monroe County's economic development experts should provide:

Foreclosure lists and even pre-foreclosure (those households who have skipped one or two mortgage payments), posted online by the county clerk (call them eClosures!).

Advice on which types of properties to target, and which to avoid, should be a Chamber of Commerce staple.

And if you're about to be foreclosed on, chances are you're not working a real job. That means you have plenty of time to surf the Web, looking for prime foreclosure bargains to bid on. An eBay-like Web site for day trading foreclosed properties is just the kind of thing IU's informatics department could design, and the Board of Realtors could deploy (eClosures, again!).

Now just add in the one missing link: low-interest, high-risk financing for the fundamentals of foreclosure arbitrage, supplied by local banks even, and the other 80 percent's back in the economic saddle, again!

Gregory Travis can be reached at greg@littlebear.com.