A few days ago I received a Groupon for a decent Mexican restaurant nearby. I bought it and used it to take a suddenly indigent friend out to dinner. While we ate, I reflected that even though we overspent the $30 Groupon by $17, the restaurant was going to get $22.50 for a $47 meal. On the one hand, you can buy a lot of beans for $17, but on the other, I just couldn’t figure out what was in it for the restaurant. It has been around for a long time and is well known in Miami. I eat there occasionally, but not often. I did make a trip I wouldn’t otherwise have made, but I’m unlikely to go again soon. Yet Groupon cleared a clean $7.50 on the deal, with only the price of creating the email as its overhead. On the surface, you’d say “Wow, no wonder Groupon has such a high valuation….this is as close to free money as it gets. “ But when you dig a little deeper, you realize that unless the restaurant owners are completely blind, they won’t run that deal again.

Why not? Well, for starters, how do you quantify the ROI? There is no way for the restaurateur to know whether or not the Groupon generates repeat business. The Groupon purchase wasn’t completely anonymous (assuming Groupon sends them my email address), but my future purchases sure will be.

In fact, when I look back on all the Groupons I’ve received via email, I don’t think any of them were from the same retailer twice. They’re mostly from small local restaurants (with the exception of the famous Gap Groupon) or other local specialty businesses. While Quiznos made the decision to promote its sandwiches via Deal of the Day in some parts of the country, Quiznos is a franchise business, so in my mind it still falls into the small business category.

This brings me (finally!) to the subject of this piece — Bubbles. Last time I looked Groupon enjoyed an approximate valuation of $6 billion. Institutions will invest, and somewhere along the line, individuals will buy into the institutions that made those investments. And as sure as I am sitting here in my over-leveraged house on a hot Miami morning, that investment money will evaporate like pretty bubbles in the air.

You’ve probably figured out by now that I’m not rushing to get in on Groupon’s IPO action, but the bubble issue is bigger than that. Somehow, what we used to call the American Dream has turned into a chase for the next pretty bubble in the air. Our homes (which used to be the end game of that dream) turned into big ticket credit cards that we used to fund everything from second homes (guilty!) to cars and other possessions. What we used to call the Industrialized World has actually turned into the Consumption World while what we used to call the Third World has become the source of almost everything we consume, the Supply World. As retailers, we rejoice over continued reductions in IMU, and fret over the possibility of inflation in China, even as we notice our customers seem to be spending less and cherry picking more.

At the same time, the media is filled with political posturing over the debt ceiling. And we desperately look for someone to blame. Politicians, political parties, governments, dictators…surely it’s not our own faults. In fact, we have all, collectively and individually been chasing pretty bubbles in the air. As Alec Baldwin just succinctly put it, “They used to call it ‘Guns and Butter.’ Today, it’s drones and frappuccinos. “

What’s the bottom line? What’s the call to action? Simply this: Can’t we make anything in our once industrialized world? Our PACs lobby for more incentives to source off-shore. Who is going to lobby for making things here? And why do we care? Simply this: if people can’t buy what we sell, we’re all in trouble. Right now, the luxury market is strong, while the rest of retail is a bit tenuous. That’s not because we’re bad retailers. It’s because our customers don’t have much discretionary spending money anymore. We’ve pretty much euthanized our manufacturing base, which indirectly or directly impacts consumers. And while we do employ a lot of people in retail, it’s just not enough to support a population of 300 million.

In my life I have never known so many people so close to the edge of poverty as I do today. My friends are not in their 20’s, nor did they start life as disadvantaged children. Yet their prospects are not bright. We all chased pretty bubbles. Now individuals, cities, states and countries are running out of money. We’re all hitting our individual and collective debt ceilings. It’s time to stop chasing pretty bubbles in the air and get back to basics. Sustainable economies have a supply side and a demand side. We really have to start producing again. Or we’ll have no one to sell anything to.