If not now, then when?

The current economic difficulties are exposing the weaknesses in some of America's core economic institutions. The mortgage crisis and the subsequent troubles of IndyMac, Freddie Mac, and Fannie Mae are bringing public attention to issues that left-libertarians have been harping on for a long time: our system of land ownership and (fractional reserve?) banking. Are we in a position to take advantage of public attention on these issues? Does anyone have a good outreach strategy? Is there any way to know if we are winning any converts?

I think this is stuff we need to think about, and act on rather soon. I can't say that I even have a solid understanding of the issues involved. Do we have access to any solid, accessible publications of critiques by economists? Is there a good way to publicize these?

For what it's worth, I did a half-hearted test of a prediction made by some Georgists--that real-estate taxes reduce land speculation, and thereby minimize the boom-bust cycle in real-estate, and via the wealth effect, these taxes can also minimize the general boom-bust cycle. To test this, I found some data on property tax rates and real estate price deflation (by state). I failed to identify any correlation, but I didn't have high resolution (i.e. county) data and I'm not sure I was even looking at the right statistics. Are any land-value economists conducting similar studies?

Given that homeownership acts to tie a person down, inhibiting the mobility of labor, and also acts psychologically to discourage other forms of saving, perhaps the biggest lesson from this crisis needs to be an end to programs that promote homeownership as an absolute good. I'm sure there's an ideal level of homeownership, but to push society past that ideal through government tax incentives has really caused serious problems.

would be a far larger weighted factor than real estate taxes in terms of modeling price behavior.

I focused on the real estate taxes because that can probably be tested---there is variation in real estate taxes around the country, just as there has been variations in the housing bubble.

I agree that the year-to-year changes in interest rates outweigh the whatever variation we're seeing due to real estate taxes (if only because real estate taxes are so low, and rarely focus specifically on land)

You guys seem to be saying that these issues don't really matter. I brought them up because they are the "big ideas" among left libertarians. While these issues nag at me, I've generally put them aside in favor of focusing a hodge-podge of little issues...which seems to be what you guys are saying.

I try to mix in some "Big Idea" posts along with the topical chatter. The Big Ideas I'm interested in are evolutionary stability/efficiency of anarchist organizations from a Game Theory/Rational Choice Perspective, Libertarian Class Theory (and it's analytical cousin, Public Choice Theory).

In terms of correlating housing prices with real estate taxes, knowing what I know about how mortgage lenders were handing out NIV, high LTV investment property loans like candy the past 5 years, taxes are going to have a very weak correlation(other than, perhaps, lagging correlation) with price behavior. A much better explanatory model for prices(during this decade) would concentrate on how cheap money created an incentive for Investment and Commercial banks to use short term commercial paper to buy higher yielding Mortgage-backed exotic derivatives. These highly profitable yield spreads eventually resulted in a big-time relaxation of underwriting standards for mortgage loans at the retail level, which in turn fueled increased housing/property demand and speculation. That bubble has thoroughly popped. Last I heard, most mortgage loans are now going through FHA, Fannie and Freddie have popped as well. when FHA becomes the last standing default lender, this represents a serious deterioration in the functioning of the lending system.

I think I inadvertently referenced the anarchist "big idea" (anarchism itself), when I really wanted to refer to something a lot smaller and well defined -- policy proposals.

Big Ideas I'm interested in are evolutionary stability/efficiency of anarchist organizations from a Game Theory/Rational Choice Perspective, Libertarian Class Theory

These are important, and I'd like to contribute more to this myself, but I also think that these "big ideas" are a bit to intellectual for them to be effective as propaganda (in the short term). I think our intellectual world is ready for anarchist ideas (I'm partial to complexity theory as an inroad), but that's a long, hard slog in terms of propaganda. It'll take decades to develop strong theory and convert intellectuals. In the subsequent decades, we could even see changes in society.

I think the vast majority of people are not interested in theory, and are looking for "practical" ideas. Within that range, the ideas surrounding land ownership and banking are the "big" ones, in that they involve fairly well-defined reforms that could have radical impacts on our economic and social structures. I think these are also good issues to get people to start thinking about the more abstract "theoretical" issues.

Anyway, I'm not a big proponent of these ideas myself (my favorite "big policy idea" is ranked voting), but I'd be interested to know if any of their proponents are taking advantage of the current economic disruption to test their theories or win converts. I guess not.

I don't know that I can explain this idea well (I think Fred Foldvary can probably do better), but the basic idea is that land prices are a function of land rental value and interest rates. In the absence of speculation, high prices can represent either high rents or low interest rates (i.e. available credit).

However, speculation does exist. If investors expect rents to rise, then they will also expect land prices to rise. This can drive up prices, creating further expectation of price increases, and bring even more investors into the game (i.e. credit becomes easy for real estate purchases because everyone--borrowers, lenders, and intermediates expect prices to continue rising, which will assure that any loans are repaid).

In an environment with substantial property/land taxes, the expectation of increased rental values does not cause prices to go up, because the increased rental values are matched by increased taxes. Since there is no reason to expect real estate to be an "easy money" investment, credit remains reasonable and we avoid the bubble/crash.

At least, that's the theory as I understand it. The core point is that if the owner gets very little of the land's rental value, then land ownership has a very small market price.