If government policy can help in these circumstances, it’s going to be policy that encourages mobility, not rootedness.

From Will Wilkinson:

"Don’t Wait for a Job to Come to You

by Will Wilkinson on January 28, 2009

That’s my advice in this morning’s Marketplace for the tens of thousands of Americans who have lost, or are about about to lose, their jobs. I knew this wouldn’t be very popular advice, and I was right. A number of commentators ask “What about the house?” Good question. The policies that subsidized homeownership for millions of Americans for whom it might not otherwise have made economic sense are the same ones that led to the massive misallocation of capital that contributed both to this recession and to the meltdown of the financial sector, which has made the recession worse. That is to say, a Fed policy of low interest rates, home mortgage deductions, the positive encouragement of sub-prime loans, etc., etc. have doubly or triply screwed over huge numbers of Americans. Lots of people are now losing their jobs in part because of stupid homeownership subsidies. The sensible thing to do when you can’t find work locally is to pick up and go where you can find a jobs (and, contrary to one commenter, the fact that unemployment is up in every state doesn’t begin to imply that no one is hiring anywhere.) But if you can’t sell the house at all, or if you have to sell it at a huge loss, that’s obviously going to make it hard to move.

That’s one reason why in the commentary I wanted to emphasize just how terrible it is to be unemployed. In terms of psychological well-being, it really is one of the worst things that can happen to a person. And I undrestand that there are lots of forces that hold people in place. But if we’re not even willing to consider painfully abandoning sunk costs, we can put ourselves in the way of even greater pain.

If government policy can help in these circumstances, it’s going to be policy that encourages mobility, not rootedness. The first thing government can do is to stop subsidizing homeownership in a way that anchors people at precisely the times when they most need to set sail."

Me again:

Telling people that packing up and leaving is our solution to employment problems sounds sensible, if you believe that there's no social cost to such a policy. One reason that only property owners could vote at one time was the belief that in order to really care about an area, you needed to be rooted to it. Although I'm not justifying such a policy, there was some truth in it. A society of highly mobile people leads not to less government, but more, as social relations fray and people rely more on government to help them, as opposed to family, friends, and the community. A decent social safety net would, paradoxically, allow people to try and remain in an area that they're rooted to. Some movement is of course inevitable, but easing such a transition is a much better path to follow

Me responding to a post:

Anonymouse,

It's not about renting vs owning. I simply used a historical example that seems interesting to me. I'm now renting. It's about living in a community and being part of it. I simply disagree that most people are like you. I lived in a college town for 33 years. The permanent residents were generally far more committed to the community than the students. I moved last year to a new city. It doesn't quite feel like mine yet. I still feel that I might move on. You yourself say that you cared about some, but not all, of the cities you live in. Communities need permanent residents who are committed to the area and locality, friends and institutions, not just a job. I believe that asking, as you say, poor people or unemployed people, to simply uproot themselves when times are hard isn't likely to lead to people who want less government. My view.
Thanks for the comment,
Don