On the other hand, the US has (had?) an array of social programs to help people in those situations transition into new roles. The Atlantic published a pretty good piece* on why they haven't wound up working out as well as they could, and it does sound like a major reason is that people won't move to where the jobs are. And regardless of their reasons for wanting to stay, that usually is on them, isn't it? Otherwise, they're essentially asking the government to subsidize their lifestyle choices.
* https://www.theatlantic.com/business/archive/2016/10/trade-w...
[1] http://www.tradingeconomics.com/united-states/households-deb...
[2] Or any negative PR that happens to be recorded in the annals of google for all eternity
Maybe solution is change in legislation that will scrap the mortgage industry, and make sure people buy properties in cash, or not at all? For example, don't make mortgage interest tax-free, enforce harder criteria for mortgage takers (like, no mortgage loan can be for over 50% of property value or 100% of pre-tax annual income of the buyer's household?). Yes most people will become renters for life, as they are in Europe, but at least this problem will be solved.
What you call fake economy is actually pretty real, yes its maybe not used responsibly by a lot of people. But lets remember this: while a lot of rural folks are feeling the pain (quite literally, looking at the opiod epidemic) the American economy as a whole is doing pretty fantastic. A ton of people are comfortably building equity in their homes.
IMO, this is exactly the root of the issue though. You can't bring your home with you when you move. Having your only major equity stored in an illiquid and immobile asset is extremely constraining.
I am sympathetic to the idea of wanting to own a home. I'd like to afford owning one myself one day! But we can't keep pushing housing costs higher and higher on mountains of debt that keep people chained to their property. Maybe getting rid of the interest reduction or enforcing more stringent mortgage conditions aren't the solution, but I think that somehow we have to get the price of housing to go down (and IMO there's no single solution; it's going to involve a combination of zoning reform, mortgage and financing reform, tax reform, and some sort of compensation for dropping property values for people who don't have savings apart from the value of their home).
WP: Some of the lack of mobility is due to high rents in cities, which keeps many people out, right? You cite some research that shows if it was cheaper to move into American cities, GDP growth would be much higher, and the economy would be more dynamic.
Cowen: Enrico Moretti’s estimate is that GDP would be 9.5 percent higher. That figure is hard to estimate, but it’s not a tiny effect. Right after WWII, adjusting for inflation, an apartment in Manhattan cost $530 a month. That’s unimaginable today. It’s a big reason why mobility has become problematic.
[0] https://www.washingtonpost.com/news/wonk/wp/2017/02/28/upper...
But since the 1980s the number of reliably booming areas has decreased. The current boom in Silicon Valley is not a mass phenomena -- it creates tens of thousands of jobs instead of millions of jobs. And it very much gives off the vibe of being a temporary bubble, so people are less inclined to sell their house in Iowa and move to San Francisco, as there is the risk they will arrive just when the bubble is ending.
Unless you're some starry-eyed kid that dreams of making it in Hollywood or SV or NY's art scene etc (and the people in those places rarely care for such jobs), you don't particularly like to move.
You might bite the bullet and do it if you're hopeless and jobless, but in order to move, opportunities need to be there for you elsewhere. In an era of increased de-industrialization and crushing of the working/middle class, they don't exist as much.
And I'm not sure about the past being much different. Americans used to be very concerned with getting their house with the "white picket fence" etc to just carelessly hop from one place to another. Besides they used to have jobs for life in decades past (factory, corporate, etc) -- only those that really wanted it moved to make it big, not just because they were forced (talking post-depression era of course).
Also: "Indeed, it is widely believed that internal migration rates in the United States—that is, population flows between regions, states, or cities within a country—are higher than in other countries. This belief is not exactly wrong, but reality is more complex. For example, the Dust Bowl migrants of the 1930s were not representative of their time, but rather were an exceptional case during a period of markedly low internal migration (Ferrie, 2003; Rosenbloom and Sundstrom, 2004). While the United States has historically had one of the highest migration rates in the world by many measures, citizens of some other countries—including Finland, Denmark and Great Britain—appear equally mobile. Moreover, internal U.S. migration seems to have reached an inflection point around 1980". https://www.federalreserve.gov/pubs/feds/2011/201130/201130p...
And: https://www.nytimes.com/interactive/2015/12/24/upshot/24up-f...
Sadly, there is absolutely no way to fix this (while Trump's plan to shut down Obamacare and effectively cripple Medicare is a step in 'right' direction LOL)
Rural people really are different from urban people. There are probably brain differences here, both conditioned and genetic.
When you are in a city, how do you feel? Do you feel stimulated, energized, excited, enticed, and intrigued? Do you feel nervous, fearful, tense, harassed, endangered, overstimulated, stressed, strangely lonely despite crowds, contaminated by the filth, and vulnerable?
Normal urban people do not own the land they live on and often can not even access all sides of the building. The owner of the land and/or building gets to set rules. Is this perfectly normal or even beneficial? Is it instead a dystopian nightmare without freedom?
Do you think "There are lots of people here, so I'm safe" or "There are lots of people here, so I'd better be wary"?
Do you nap or openly use your phone on a subway? Do you clutch your belongings close, eyeing other passengers as threats, ready for fight or flight?
Nowadays, people move, they get a job that is uncertain to last years, while they can barely afford rent and any mortgage is over 30 years assuming you had the down payment which you don't.
Maybe a portion of Americans are more inclined to move and the economy benefits from that.