Tuesday, March 20, 2007

For some reason have been thinking about "mobility" a lot lately. Maybe this is because of all the discussion about inequality stemming from the recent surge in corporate profits without a commensurate surge in wages. One of my big responses - that mobility is extremely important, hence a need for focus on education and training.

But then I read about physical mobility in one of my many RSS needs (anyone who has been around me for a full day knows I spend way too much time reading on the Internet). I'll try to find the link at some point.

But the gist is this - that a new research paper shows that higher homeownership rates correlates with higher unemployment. This seems odd - you would think more employment would let people buy more houses. But it is actually more logical when you realize that homeownership locks people into where they live. So if someone gets laid off, it is a lot harder to move to where a new job may be than if the person is just renting. Despite owning real estate, I am a big fan of renting for several reasons.

This brings up something I've been thinking a lot about lately in conjunction with mobility - the mortgage interest deduction (here's a piece in the NY Times, by the guy that wrote my favorite biography of Warren Buffett). It is one of the biggest reasons owning is so popular. There would be many benefits to removing it, and indeed as the federal government continues to need additional funding, it may become part of the political discussion (along with being more aggressive about narrowing the tax gap, which is crucially important and has been discussed by the Freakonomists). Anyway I promise to talk about it more in the future.


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