It looks like they don't know the difference between nominal value and real value. In a housing bubble, the nominal worth of your house increases, but its real worth stays the same - unless, of course, you have a stock of houses that you can sell, but that's not the case of most Americans.
The trouble is when nominal value shrinks, it shackles people to endless cycles of debt slavery. Either that or people default, which causes follow-on cascades of defaults.
If we had a low-debt cash-only economy this might not be the case, but our economy is so far from that it's not even worth talking about. We are absolutely a credit economy, and when the numbers get smaller in a credit economy pretty much everything breaks.
Eventually the collapse of the middle class will drag down everything else, including the rich.
