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Populism, Economic Nostalgia, and ‘Left Behind’ America
Economic nostalgia is a notable attribute of America’s populists on the left and right. If not for the mistakes of elite policymakers, the economic golden age of postwar America might never have ended. But it’s not just economic nostalgia that unites populists across the political spectrum. It is also the idea that reality puts no constraints on policymakers’ actions, or at least the effectiveness of those actions. Take the issue of what to do about America’s “left behind” regions. It’s the subject two outstanding pieces, one in The New York Times by Eduardo Porter, the other in The Wall Street Journal by Christopher Mims. Both are definitely worth a read.
In “The Hard Truths of Trying to ‘Save’ the Rural Economy,” Porter notes the “inescapable reality of agglomeration.” Innovative companies, the sort that generate high-paying jobs, want to locate near other innovative companies so they can tap deep pools of high-skilled worker talent. And thus you have Amazon building new campuses in New York City and Washington DC, rather than Columbus, OH. Sure, policy wonks have lots of ideas to help distressed communities take part in the evolving American economy — tech education initiatives, broadband investment — but there are no guarantees. As Brookings scholar William Galston is quoted, “I don’t know if these ideas are going to work. But it is worth making the effort.”
In “Where You Should Move to Make the Most Money: America’s Superstar Cities,” Mims also cites the technology-driven agglomeration phenomenon as a prime driver of geographic inequality and rise of “superstar” cities: “As firms cluster around talent, and talent is in turn drawn to those firms, the result is a self-reinforcing trend toward ever-richer, ever-costlier metro areas that are economically dominant over the rest of the country.”
Globalization. Automation. Rising Asia. Moore’s Law. These seem like significant macroeconomic forces that were going to greatly alter the American economy of the immediate postwar decades (especially given its reliance on American industrial power in a world recovering from global war). But, but, but, the progressive populists argue, if only Washington had been tougher on mergers that eliminated the headquarters of smaller firms, or tougher on transportation deregulation, which made it harder to get there from here. Also, of course, Walmart. Always Walmart.
Then again, trade-offs. For instance: Would America have been better if transportation hadn’t been deregulated in the 1970s? This from Regulation magazine in 2014: “Since most economic controls over domestic commercial aviation ended in the late 1970s, traffic has grown by orders of magnitude, inflation-adjusted fares have fallen, computerization has revolutionized the way tickets are bought, frequent flier points have become a second currency, the range of routes available — provided we are willing to change planes — has expanded out of all recognition, and low cost carriers have come, and just as often gone.” (I think the easier case is to argue for more deregulation in that sector, not a reversal.)
Or this from the BLS on trucking deregulation: “In response to deregulation and the intense competition that followed, the trucking industry has changed the quality and types of services it renders. By most accounts, the resulting reductions in cost have been passed on to consumers. Today, trucking services are more responsive to our increasingly dynamic and complex economic environment, incorporating improvements in technology that have pervaded all industries.”
Populists like simple stories. But maybe they have the wrong one.
Published in Economics
Nostalgia for the first half of “The Deer Hunter,” which is far more depressing than the second half, is something I’ll never understand.
When I moved to Flagstaff in 1992, I was told by an older attorney that I would make less money than I had in Phoenix, but would live longer and happier. All three have been true.
JimP,
Isn’t the “trying to save” meme creating a false dichotomy? First, we posit the impossible to fight deterministic trends that obviously must completely destroy some of our economic participants. Then we say how futile any attempt to “save” them would be. Of course, as we have already made a Gd like judgement about them we don’t need to take a second look. In fact, we can do whatever policy we like to even hasten their demise as they were going down anyway.
I think you would have been sure 18 months ago that Musk would have his $35,000 Tesla taking over the market. As it turned out, your Gd like judgement was as flawed as his was. When we say we should let the market make the determination we really ought to mean just that. The policy should be neutral. If a small boost of a much-needed component in their mix can do it for them then why not give it to them. Funny how if Man Made Global Warming turns out to be the fraud that it most certainly appears to be, then all the people in the Detroit area and elsewhere whose lives were massively disrupted will have been damaged by false judgements. We can’t bring the jobs or the people back that’s true. However, you might think we’d be a little chastened by the experience. Instead of debating whether it was “worth saving them” we might realize that we aren’t Gd and there is no need to condemn them either.
If we were to objectively look back on the last 50 years we would realize how many people were damaged for no real economic cause at all. They were condemned as obsolete by elitist ideologues selling their cheap grand theories. Once you’ve accepted the premise, whether you want to hasten their demise in a Darwinian obsession or want to turn them into infants and put them in a magic nursery for the rest of eternity, doesn’t make much difference. You have already judged them useless and now you are just debating about the sentence.
Too bad that those who are quick to judge often don’t receive the benefits of their own shots from the hip. Then again Gd has a way of evening the score.
Regards,
Jim
Amazon putting half their new headquarters in the seat of government has to be the least surprising story of 2018.
This deserves to be in the Quote of the Day series. Beautifully written and profound.
Go to Smith. They couldn’t even spell Smith.
And the other half in the media capital of the U.S., showing that Mr. Bezos knows who he wants to influence by being within close proximity of where they live and work.
As for rural economics here, New York City and New York State gave huge tax breaks to Amazon to relocate to Long Island City, breaks that even some of the progressives are howling at Cuomo and de Blasio about. And of course, the same governor who is giving lavish tax breaks to get 25,000 more people into western Queens is the guy who pandered to the same people who helped elect him and de Blasio by banning anyone in rural Upstate New York from taking advantage of the natural gas and oil shale underlying virtually all of the western part of the state. So it’s not simply a case in New York of rural areas dying while people are flocking to NYC, it’s government gaming the system to bring more people to NYC via lower taxes for Amazon, while those upstate get zilch from the state government in terms of accessing an economic sector that could provide them with $50,000-$100,000 a year jobs. They’re being made to die by the governor, because he knows he doesn’t need them to win elections (Cuomo’s pandering on fossil fuels extends to not only banning fracking, but banning pipelines, so not only can you not drill for natural gas, other states can’t ship their natural gas to the six New England states in the cheapest way possible, because you can’t get to New England without going through New York).
In the words of Maynard G. Krebs:
To paraphrase a story surprisingly on a wall at Jimmy John’s:
A fisherman takes a wealthy man on a fishing trip where they catch some incredible fish. The wealthy man asks the fisherman what he does with the fish. The fisherman replies that he sleeps late and goes fishing and catches only enough to feed his family. The wealthy man, trained at Harvard, tells him he needs to expand his operation because he could make millions and retire early. The fisherman asks what he would do next. The wealthy man responds that he could then sleep late and go fishing.
FYI,
Amazon moved from New Mexico toJeff Bezos, who was from Albuquerque, New Mexico choose Seattle to start Amazon, so he could take advantage (poach) talent near Microsoft. That’s agglomeration.h/t: Gary for the challenge
Interesting discussion of big tech here with Jim P, who is possibly on the Google payroll.
I’ve only read a plot synopsis, but the first half seems to be about marrying high school sweethearts, preparing for military service, having fun with friends and family, and going hunting.
Why is that so depressing?
@jon1979 You should write a piece counter to this one. I would upvote that.
I get it, but why should we be insouciant about the effects of “Globalization. Automation. Rising Asia. Moore’s Law.” on flyover America? The folks who live in flyover America don’t need the dissing they get from their coastal elites.
There is a lot going on, and change is not just stressful, it causes disintegration, unraveling that requires re-raveling and while the left, by its very nature, picks at the stresses to accelerate disintegration most of the stresses and strains are natural products of rapid change and bad policy. Bad policy, poor education, too many regulations make adjustment, re-raveling, more difficult. We can’t undo change but instead of looking for some wonky policies to fix things we must stop bad policy; in the cities that make them too expensive to live in, in education and training to move monopolized schools to choice and let parents and employers figure out what training works for whom where. In labor markets to stop illegal immigration and reduce legal immigration, our unskilled and semi skilled workers are being overwhelmed. Eliminate minimum wages so business can pay little or nothing as workers learn, where most people learn job skills, at work. Continue eliminating regulations especially of the financial sector. And so on. Trump’s approach to trade is out of Democrat’s play book, but it’s the right target. He needs to get it right. None of the right policy fixes will be easy or quick but unlike the whole catalogue of possible clever policies from the top, market adjustment, choice works in the right direction, especially when it’s impossible to know exactly what that direction will be even in the near future.
I think you may have the story backwards. Bill Gates left Harvard to move to Albuquerque to work at the company that became Microsoft. Microsoft then went to Seattle.
Silicon Valley, Seattle, Boston, New York City and Austin have all made the jump. Why them? Why not other places?
No one has nostalgia for dysfunction. But community, religion, tradition, family, friends – these are all good things! It’s true that there is something deeper which a few are compelled to search after. Well, that Pennsylvania industrial life might not be satisfactory to those searchers – maybe no life will be satisfactory for them.
Right. Like Microsoft locating it’s HQ in Redmond WA and Amazon HQ1 in Seattle.
So, what is “populism“? I saw a post earlier saying that “populism” was doing what was popular. But that is not it. Populism is doing things for the benefit of ordinary people. Ordinary people are working class folks. “Blue collar” in 1970’s; “proletariat back in 1900; and “plebeian” back in Roman times. It is a long-standing conflict that government often does something for one-class at the expense of another class. It is a classic struggle of rich v. poor and those that gots v. thems that don’t.
Ideally, governments would enact policies and regulations that are win-win and benefit everyone. But that is not always possible (in which case less govt. is better). The hot example these days is immigration, where unenforced borders are very good the wealthy class and very bad for the working class.
Why is it that populism is so disparaged in media? Why is that a government “for the people” is demonized? I assume it is because the elites control/make-up the media and they are selfishly preserving what they got. Marx understood there was a struggle, but he did not understand that the important capital was not a cotton gin, but was intellectual capital and that it would be universities and media that would align with bureaucrats against the workers. It is ironic that universities are filled with Marxists and don’t realize they are villain in the story.
In a way, I hope DC and CA never fix their housing problem because maybe eventually, some smarty pants with a great idea, tired of living in his semi-trailer Tiny House will get fed up enough to move somewhere else and start a business with a couple of his other friends tired of living out of their cars and flat-bed/moving truck Tiny Houses.
Given the shakedown payola that Amazon finally got, I don’t think anyone here in Columbus was really all that sorry to lose that bid. And Columbus is doing rather well, even if rural Ohio is in collapse.
Probably better watch the movie then.
The second half sounds too depressing. The first half simply sounds like ordinary small-town lives before they were physically and psychologically shattered by the Vietnam War. If there were some characterization reasons for the first half to be depressing, I can’t see why it would be relevant to the discussion.
Rural America is not dying, it is being murdered. The Supreme Court forced the states to eliminate geographic representation in state legislatures, thus stripping the rural districts of representation, which favors urban districts. Lack of power equals destruction for geographic and political minorities, which leads to Californication-an urban elite ruling over increasingly impoverished serfs.
The so-called wave of populism in Western democracies is the sound of the consent of the governed being withdrawn.
This last line is a fantastic one.
The same people who talk about people being left behind are the same people who support massive transfer payments, in a thousand different forms (welfare, subsidies for agriculture, expanding internet to “the last mile” of every road in every state – pick any several dozen of your own personal favorites).
So. You can’t have it both ways. You can’t create economic incentives through subsidization, then complain about the results, and advise that your fix is more of the same.
Well, you could do that. But you’d be an idiot. Which means we have idiots in Congress.
Kind of a heads-up there, America.
Government “for the people” is demonized by the press because they hate us, and want to kill us.
Or they could move and get a job? Moving is hard but if poor blacks during Jim Crow could move across states, couldn’t we do that now?
This is the same stupid comment made by the libs (and Kevin Williamson). Despite what you and many others think, it is necessary to have people living in the places where they work, when they work in the physical world. You cannot pump oil, or mine coal, or grow crops, or build roads in cyberspace. Nor can you have factories or, any other kind of business that requires actually making physical objects in places like Silicon Valley-the current occupants of those places do not want to live next to industries, and in any case, industries cannot afford to buy land in those place, nor can they pay workers enough to live there.
What has happened is that urbanites have used their political power to favor themselves and their cities, and have disadvantaged every one else, despite the fact that they cannot feed themselves nor produce energy for themselves. Even in oil-wealthy Los Angeles, they cannot produce enough energy to power their lifestyles.
Coastal elites seem to have forgotten that the urban culture that they love so much is entirely dependent on those professions and people that they despise and seek to destroy. Almost no grocery store or Walmart has more than three days worth of food on hand. Without fuel for railroads, trucks (and truck drivers), people in coastal cities will be hungry in three days if the transportation grid shuts down, and cold (or hot), thirsty, and hungry if the electrical grid shuts down. The upper crust will probably be alright, but any one not in that class will be in serious trouble.
I don’t understand your point. I wanted people without jobs to move. The people with work in factories or farming seem to be doing fine.
Furthermore, corporate welfare and food subsidies are a huge part of American corruption.