"IPOs declined from $109 billion in 1999 to just $20 billion in 2009."

Given reduced demand for capital from corporate America for productive investments, U.S. investment banks went looking for other deals to make up for the missing income and, in the process, figured out how to transform the housing market into a corporate finance laboratory. The fact that we diverted so much money in speculation on housing instead of machinery, equipment, R&D, infrastructure, and start-ups explains a lot about our economic predicament. To restore our global competitiveness, capital needs an innovation home, not merely a residential home.