Red vs. Blue, Growing vs. Shrinking, Sane vs. Out of Control


In a fascinating post on the New Geography blog, Joel Kotkin writes about a new way to think about the states:

Generally speaking, states in relatively good economic shape are concentrated in an economic “zone of sanity” across the vast Great Plains. They are also in the least “fiscal peril,” according to a recent Pew study. Not surprisingly, these states see little reason to extend federal power and increase taxation in order to bail out their more profligate counterparts.

As opposed to, say, some other places:

In contrast those states most favorable to a more powerful Washington are often the ones suffering the worst fiscal situations. They also seem least willing to solve their structural budget issues. Free-spending, poorly managed states like New York, California, Michigan, Oregon and Illinois–all of which are controlled by the president’s political allies, need massive federal largesse to pay their bills without ruinous tax increases or painful cuts. Some localities in these states could become the Greeks of late 2010 as they head inexorably toward defaults.

He points out that places like Kentucky and the Dakotas are experiencing a net gain in population. Are people voting with their feet? And who is better prepared for the future? Put it this way, in a knowledge economy, do you really have to be in a big city in a high-tax state? I’m pretty sure you can get a perfectly tasty cappuccino in Fargo. (James? Am I right?) And I know you can get a great one in Louisville.

There are 6 comments.

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  1. Profile Photo Inactive

    If you go to the North Dakota-Minnesota border, near Fargo-Moorhead, you don’t need an economist to tell you which State is more business-friendly.

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  2. Profile Photo Member

    You first.

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  3. Profile Photo Inactive

    From my perch in the Carolinas, we are happy to take the businesses, jobs, revenue and people that are fleeing the flourescent blue states (leave your politics, please). During the recession, BMW has spent hundreds of millions expanding its plant here in Spartanburg. VW will open soon in Chattanooga, Kia is doing well in Georgia, Hyundai and Daimler seem very pleased with Alabama, Toyota is still at work in Mississippi and Tennessee, and Nissan is doing well in Nashville.

    That’s just the auto industry snapshot. For example, Boeing will assemble the 787 not in Seattle, but in North Charleston, SC. Research Triangle Park between Raleigh and Durham hosts tech and biosciences companies like IBM, Red Hat, SAS, Glaxo SmithKline and others. Charlotte remains a main financial services center. And I haven’t even mentioned Atlanta, Houston or Dallas.

    Here’s the point – tell your friends they can sneer at “flyover country” all they want, but when the bill comes due on the debt they’ve run up to fund a blue-haired utopia beginning no later than age 62, those of us actually making and doing things may not be so keen on paying.

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  4. Profile Photo Inactive

    One last thing, we’re also happy to take the Congressional seats these places are hemorrhaghing.

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  5. Profile Photo Inactive

    As a replacement for the nickname, “fly-over country”, the phrase, “zone of sanity” is a great idea. I can personally testify that the implied “zone of insanity” designation for the left coast is entirely apt.

    As for D.C. and the Northeast…”insanity” doesn’t seem quite right. Perhaps “zone of obsolescence”?

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  6. Profile Photo Member

    “Are they moving with their feet?” Based on this fascinating interactive chart from AEI, the answer is a deafening, “YES!” It shows migration from a given US county to other US counties in 2008.

    • #6
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