it wasn’t an excess of greed and speculation which led to the financial crisis, but rather an excess of overcaution, with an attendant surge in demand for triple-A-rated bonds. Investors didn’t want risk, and investment banks made billions of dollars, during the boom, by waving their magic securitization wands and seemingly making that risk disappear.

And that might be the biggest obstacle to effective reform.  Folks want to pretend that there is a system of public finance under which no one (except a few disliked rich or profligate people) will ever risk losing anything. Everyone’s savings will always be protected.  No one will ever be unable to afford to stay in her home. All needed medical care will always be provided at a reasonable (or no) charge. Successful politicians pretend that this can be achieved, with just a few new laws and/or taxes.

Then here come the Georgists, or other rational reformers, saying “we have a system that will work really well, people will be rewarded for doing productive work and won’t be able to live off others.”  What? I won’t be able to count on using equity in my land to fund my retirement? Of course, I never could count on it anyway, but everybody pretended that I could. Successful politicians pretend that something pretty close to absolute security can be achieved, if only we elect them and they pass a few laws.  Georgists aren’t so good at pretending.