This is wrong, wrong, wrong.
The solution to the bubble and bust economy is not to hope for wiser economic managers, or to put put up with "muddlers." It is to change the system so that such crisises can't happen, no matter who is in charge at the moment.
The way to do that, in the case of housing, is to replace the property tax, which is an unpredictable mash-up of taxes on both buildings and land, with a simple Land Value Tax. By taxing on the value of Land alone, and adjusting the tax honestly every year - which can be done remotely and in bulk with today's Computer Assisted Mass Appraisal software - states and communities would collect all the revenue they need, consistently and in any economic climate. Land values fluctuate far less than building values, and even less than revenues from wildly gyrating stock markets (as California keeps rediscovering).
Speculators would have to stop squatting on vacant land, i.e. they would have to pay up or sell, ending urban sprawl, and speculator-driven bubbles would be impossible because the "fuel" for them would be taxed away. Prices would come down as the "rent" value of the land - which comes from the density and productivity of the local population - is returned to that same population as a whole, for government projects, like new parks to make communities even more desirable places to live.
These ideas are not new; in fact they are 130 years old this year and were first offered, in greatly expanded form to include ALL natural resources, while EXCLUDING taxes on the results of productive activity - that is abolishing taxes on wages and true capital (buildings, bridges, trucks etc.), by the author of the best-selling economics book of all time, Henry George (can you imagine any other economics book selling 2 million copies in its first year today? And the year Progress and Poverty was first published was 1879! It is still in print).
Today's economists and commentators like NY Time's David Brooks should read the latest issue of the Georgist newsletter Groundswell, or talk to any of thousands of proponents in Henry George Schools throughout the world (and here in NYC), legislators in New England and elsewhere busily passing laws to tax land, not the enhancements built upon them (e.g. buildings).
George's principles apply to the oil markets, to the radio spectrum, to any natural resources at all - tax the natural resources of the world, not wages or capital. This is also called the Single Tax, and it is the "least bad tax" in the words of Dr. Milton Friedman. Georgists like me would argue it is the only fair tax too.
Bubbles do NOT have to happen. They ARE predictable - Georgists saw this coming a mile away - read Dr. Mason Gaffney's "The Great Crash of 2008" written earlier that year. You CAN have growth, productivity and innovation, and social justice and the end of poverty; these goals are NOT incompatible, as traditional right-left arguments have convinced millions of uninformed masses they are. "There is a free lunch" (as Gaffney put it).
We have a choice: continue to allow the speculators and monopolists who contribute nothing to society to siphon off the source of most great wealth - natural resources - while those who labor for a living get just enough to survive, if that, OR return the profits from natural resources to all of us - to whom they rightfully belong - while letting people keep the products of the labor and savings: wages and capital.
A simple part of this would be to start by taxing resource intensive corporations like oil companies (I had to laugh today when Exxon reported its profits were down 90% from this quarter last year. Did they start making "bad oil?" No! Oil just got a whole lot cheaper and they - unfairly - get most of their profits from whatever the price of nature's oil happens to be each quarter. That money should return to all of us, since nature made it not Exxon; the profits form production: extraction, refinement, distribution and sales are theirs to keep). This includes all fossil fuel companies, mining companies, CAFOs (who need to be heavily taxed to pay for their effluence and other pollution - that'll get the pigs, cows and chickens back on the free range.) etc. Sign the petition to do just that here.