Up until now, I had never know that there was actually a theory, propounded by people with a straight face, that trapping people in neighborhoods and institutions (like public schools) is a positive because it promotes civic virtue.
If you own your home, then a lot of your wealth is tied in with the quality of your neighborhood. In theory, this should motivate you to vote more carefully in local elections. On the other hand, if you are a renter, and the neighborhood goes downhill, you will simply leave.
Collectivists prefer to trap households within specific government service areas. Their thinking is that with the “exit” option foreclosed, households will be forced to exercise their “voice” option, to everyone’s benefit. This is an argument against private schools. It goes back at least as far as A.O. Hirschman’s classic book, Exit, Voice, and Loyalty.
I would argue just the opposite, that this creates state monopolies ripe for abuse, and besides, is disastrous for labor mobility and thus the healthy functioning of labor markets. People keep arguing that this recession is long because recessions after financial bubbles are always long. I am not sure that is proven out by history.
I would argue a big reason this recession is long is that the nature of this bubble, being in housing markets, short-circuited one of the ways we get out of recessions, which is labor mobility. Trapped in homes the government encouraged them to buy but now they cannot sell, people can't move to find new regional opportunities. Where are the mass migrations to the North Dakota oil fields?