ZeroHedge provides the following graph that illustrates the perils of monetary union when language and culture inhibit labor mobility:
In the Unites States workers tend to move from state to state in search of jobs. In Europe, this apparently isn't happening; so Spain continues to suffer high unemployment and rising interest rates on its sovereign debt, even though theoretically its unemployed could find work in Germany. American work force mobility provides for a more robust economy because local conditions in North Dakota, for example, provide high levels of employment that can sop up unemployed workers from other parts of the country. However, I believe that the housing crisis uniquely harmed the U.S. economy because it interfered with this key corrective. Under more normal circumstances, people are able to sell their homes at only slight losses to move to other locales to take jobs. With the collapse of the housing bubble, many people are holding out, perhaps irrationally for a recovery of their home prices, before they make a move.
The administration's policies have contributed to the prolonged recession in two ways. First, by intervening in the housing market, and propping it up, the administration prevented the market from hitting bottom and perhaps recovering. I believe, though with only anecdotal evidence, that people are clinging to their homes, not wanting to sell. This is inhibiting labor mobility as people stay put. Second, by prolonging unemployment benefits, people are encouraged to try to hang on longer in their perhaps underwater homes; waiting for a recovery.