Recessions

Pundits generally blame the recent real estate bubble on loose lending practices and on about Wall Street corruption; they blame President Obama and other world leaders for doing next to nothing to tighten lending rules, let alone punish the bad guys, and usually conclude with Hail Mary exhortations that something must be done or it will happen again.

The deeper cause of this and past recessions is the rent seeking contagion, investors become speculators hoping to collect ever more unearned income (economic rent) before the speculative bubble bursts.

The remedy to end the recession vicious cycle is for governments to collect economic rent in lieu of other taxes, thus removing the irresistible incentive for bankers and investors and home owners to abandon prudence, bend and break rules to finance the purchase of desirable, finite, assets (in this case land) and prevent future bubbles...