Financial bubbles make smart people pour money down ratholes. That is an underappreciated aspect of bubbles like the one from which we currently are recovering.

Gyrations in the value of houses or retirement savings capture people's attention. So do bankruptcies at financial firms like Bear Stearns and layoffs at myriad companies caught in the ongoing financial downdraft.

But we tend to overlook how economic resources got wasted by nonfinancial companies that made apparently good investment decisions based on the information available at the time. That is the insidious side of the financial mass self-hypnosis that constitutes a bubble. Reality gets distorted, even for competent, prudent managers.

There are few better examples of this than the complex of transportation infrastructure devoted to handling imports from East Asia, principally the neighboring ports of Los Angeles and Long Beach, together with the Union Pacific and BNSF (a subsidiary of Burlington Northern Santa Fe Corp.) railroads.

These businesses all boomed as imports from Asia burgeoned over the past two decades. The number of containers handled at the port of Los Angeles increased 133 percent in the 1990s and then another 75 percent from 2000 to 2006. Long Beach saw similar increases. Together, the two handled three times the volume of the ports of New York and New Jersey combined.

Most container imports were destined for outside of Southern California and left the state by rail.

Container traffic pays much higher rates than coal or corn. The BNSF and Union Pacific saw their revenues grow as U.S. household consumption, and hence imports from Asia, grew.

Both the ports and the railroads invested billions to increase capacity. The BNSF worked steadily on a long, expensive project to make its "Transcon" line double-track all the way from Chicago to L.A. Union Pacific and BNSF both invested in additional 2-mile-long passing sidings so that slower traffic could pull over to let high-value container trains roll past. Both bought thousands of new double-stack container cars.

While port traffic actually peaked for Los Angeles in 2006, as recently as last year its managers still predicted an additional 300 percent increase in business by 2020. That is what you got if you extended the trend lines out.

But the trends were not sustainable. Right now, container traffic is down by more than a third from 2008 levels that were already dropping from the 2006 peak. The railroad container business has dropped at least as much. Combined with recession-caused declines in other categories of business, the two railroads each have more than 30,000 rail cars of all types parked idle across their systems.

In retrospect, it was a mistake to expect that the import bonanza of the early 21st century would continue uninterrupted. Hundreds of thousands of tons of new rails, millions of gallons of diesel fuel for earth movers, thousands of person-years in labor all went to add infrastructure capacity that isn't needed right now. Given the unsustainable nature of the "We'll buy your products as long as you lend us the money" symbiotic U.S.-Asia relationship, it may not be needed for decades.

Real U.S. resources were committed to unproductive uses because we collectively lost touch with economic reality. That, more than ups and downs in 401(k) accounts, is the true cost of the bubble.