My guess is that Veblen would say that the best way to deal with a housing bubble is to not create one in the first place.

Oops, too late... I never understood why the real estate market has to be escalated. I mean, no one can forbid to make capital gains for those willing to speculate on margin, but why it has to be so "easy"? If anything, real estate speculation has to be discouraged at any times. For once, that way of sitting on growing money does nothing good to the society. And most importantly, once a buble crashes, many people are hurt so badly.

All this craziness with real estate, market stocks, reality shows, gambling and World Poker Tours looks as if the modern prospering world decided to play a Russian rullete out of boredom: lets make just a few HUGE winners, over masses of meek loosers. I would prefer cricket - somewhat less exciting, but fun for everyone!