Underwater Home Traps Driving Unemployment

[phantom power]

Chris Mims at Grist highlights a Brookings Institution report showing that the rise in homeownership is helping drive up unemployment numbers:

The U.S. is suffering crushing unemployment, yet workers can't move to where the jobs are because they are trapped in underwater mortgages, explains a new report from Brookings. This, it turns out, is the ultimate fate of the "ownership society" that our government has been pushing for so long through Fannie, Freddy, and tax policy: People can't migrate to where they're needed most, even if their livelihood depends on it...

The data show that not only are people less likely to move from one state to another, they're also failing to move even within the same county -- say, to upgrade to a slightly better job across town, or shorten their commute.

Like the case of people holding onto jobs they don't want in order to continue to have private health insurance, this is another instance where "ownership society" market policy actually creates economic inefficiencies so profound that they seriously impact the real freedom of consumers and wage-earners.

The only people who are more "free" under our current laissez-faire market-driven policies are the executives of lending institutions and health insurance companies. Everyone else is trapped in jobs they don't want and houses they can't move out of, while the blowhards on Fox News accuse anyone who tries to liberate these people as enemies of "freedom."

http://digbysblog.blogspot.com/2011/11/underwater-home-traps-driving.html