Rezzable's RightAsRain Rimbaud and his fleshy avatar Jon Himoff.

Creating great public spaces in Second Life and other virtual worlds requires bending the rules of real-life architecture and adding a little bit of magic. Buiders want to create theaters, business areas, entertainment exhibits and other places that capture visitors’ imaginations and make them want to come back again and again.

Two of the best builders in Second Life shared their secrets with us:

Jon Himoff is CEO and founder of of Rezzable, which built the Greenies in Second Life, as well as the King Tut exhibit on Heritage Key.

And John Jainschigg of ZiffDavisEnterprise created a variety of areas for real-life businesses in Second Life.

Jon and John talked about getting around the technical limitations of Second Life, the difficulty of finding business models that work, and the outlook for virtual worlds five years in the future and beyond.

Listen and enjoy:

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Barry Ritholtz is author of the book Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy. He blogs at The Big Picture, and offers quantitative investment analysis through his firm, FusionIQ.

We talked about the Great Recession we’re now in—how we got here through a culture of government bailouts, foolish de-regulation, and shortsighted greed, as well as the outlook for pulling out and returning to prosperity.

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I actually found the conversation somewhat encouraging. A few months ago, I was panicky that we were on the verge of a collapse like the Weimar Republic or the Soviet Union. Money and cash would be worthless, you’d have to carry a wheelbarrow full of $100 bills to buy a taco, and government and social order would collapse. I have very few skills to offer in a world like that; I’m not a warrior or a doctor. I can’t even drive a nail. When Mad Max is battling the roving barbarian Army, I’d still be hunkered down in my home office, crafting the perfect, pithy tweet to encapsulate the situation.

According to Barry, things aren’t all that bad. The Great Recession has given way to just another recession—in other words, we can celebrate because the horrible news is now merely bad. We’ll continue to be in a recession until 2013 or so. Our children and grandchildren will curse our names for the hundreds of billions of dollars we’ve wasted on bailouts, which they’ll have to pay back. Otherwise, life will go on as before, and I can go back to worrying about important things, such as whether to buy a new iPhone now or hold out for the next model.

We covered a lot of ground with Barry; he’s smart and articulate. Listen, enjoy, and learn.