This is an excerpt from his book THE SUBPRIME SOLUTION. The edition I'm reading is 2008, I have a hard time believing even he thought it would go on this long.
I emphasize that the possible systemic effects are much more important than the loss of home values in a potential collapse of the real estate market. For however much home values drop, they will remain the same homes, offering the same services to all of us. But if the rate of output in the economy falls, this is the real loss, not just a paper one. The balance sheet problems into which people fall if their homes lose value are purely financial losses. But they can be converted into substantial real losses to the economy if they are allowed to destroy public confidence.
In a financial system seize-up such as the one we are now experiencing (2008 remember), we must, putting aside our political and policy differences, fall back immediately on a more basic social contact--one that dictates that we as a society will protect everyone from major misfortune and keep existing problems from spreading further, subject to the dictates of common sense.
I hate to say that clearly has not happened.