Credit is not a substitute for progress

This Weekly Standard article ostensibly is about Neil deGrasse Tyson's dishonesty, but on that subject it's a mere re-hash of a sordid record and a banal career.  The fresher material is this quotation from Peter Thiel:

Like technology, credit also makes claims on the future. "I will gladly pay you a dollar on Tuesday for a hamburger today" works only if a dollar gets earned byTuesday. A credit crisis happens when earnings disappoint and the present does not live up to past expectations of the future.

The current crisis of housing and financial leverage contains many hidden links to broader questions concerning long-term progress in science and technology. On one hand, the lack of easy progress makes leverage more dangerous, because when something goes wrong, macroeconomic growth cannot offer a salve; time will not cure liquidity or solvency problems in a world where little grows or improves with time. On the other hand, the lack of easy progress also makes leverage far more tempting, as unleveraged real returns fall below the expectations of pension funds and other investors.

This analysis suggests an explanation for the strange way the technology bubble of the 1990s gave rise to the real-estate bubble of the 2000s. After betting heavily on technology growth that did not materialize, investors tried to achieve the needed double-digit returns through massive leverage in seemingly safe real-estate investments. This did not work either, because a major reason for the bubble in real estate turned out to be the same as the reason for the bubble in technology: a mistaken but nearly universal background assumption about easy progress. Without fundamental gains in productivity (presumably driven by technology), real-estate values could not go up forever. Leverage is not a substitute for scientific progress.