Blue states have better economies than most red ones. What lessons can we take from this?
From historic tax cuts to widespread rollback of regulations, the Trump administration and Republican-controlled Congress are working to remake the federal government into one giant red state, albeit with the world’s most powerful military.
The moves come despite the experience in Kansas, where Gov. Sam Brownback set out to implement a “laboratory” of such practices. The result was a fiscal disaster of such enormous proportions that the state’s GOP-majority lawmakers overrode his veto this year to raise taxes, undoing his 2012 reductions.
The big picture is even more convincing. In general, blue states are richer, healthier, more innovative and educated than red ones. Their economies are more competitive, high-quality and diverse. This, despite higher taxes and more regulation of business.
Blue states are also innovation leaders. In the Milken Institute’s 2016 State Technology and Science Index, Massachusetts was No. 1, followed by Colorado, Maryland, California and Washington. At the bottom were Mississippi, Louisiana, Kentucky, Arkansas and West Virginia.
The Information Technology and Innovation Foundation’s State New Economy Index measures 25 economic data points. Massachusetts, California and Washington were the leaders. West Virginia, Arkansas and Mississippi were at the bottom.
The pattern certainly holds for Washington and Seattle, although Washington lacks a state income tax. Median household income for the state was $62,062 in 2015 vs. a national average of $53,889. In Seattle, median household income stood at $70,594.
By contrast, Arizona, a red state almost as populous as Washington, had income of $50,255.
The exceptions are rare and have special circumstances. For example, Texas benefits from being an oil superpower and enjoying decades of massive federal investments. The Lone Star State still ranks low on most measures of social well-being.
Also, all of Texas’ big cities, including high-tech Austin, are blue. Dallas has the largest light-rail system in the United States.
Another exception, Utah, which is making progress as a technology hub, enjoys the unique social cohesion and leadership of the Church of Jesus Christ of Latter-day Saints (some counties have a Mormon population of more than 80 percent). The state’s non-Hispanic white population was 79 percent as of 2016.
Otherwise, the poorest states are generally red.
The lesson should be clear: If you want prosperity and greater opportunity, align policies with those proven effective in blue states.
Among them: High public investment in education and infrastructure; stronger public safety nets; an outward-looking attitude toward the world, an environmental ethic and tolerance. These attributes are even more important in a knowledge economy where top talent prizes quality of life, broad social acceptance and choices in such things as transportation.
The red states respond that they are more affordable. That many blue states are more unequal. And they assert that they “win” because generally more people are moving there than to blue states.
As Joel Kotkin and Wendell Cox wrote earlier this year, “Democratic ‘blue’ state attitudes may dominate the national media, but they can’t yet tell people where to live. Despite all the hype about a massive ‘back to the city’ movement and the supposed superiority of ultraexpensive liberal regions, people are increasingly moving to red states and regions, as well as to suburbs and exurbs.”
There are exceptions to that trend too, of course. Washington’s population increased by 8.4 percent from 2010 to 2016, vs. a national average of 4.7 percent. Oregon grew by 6.8 percent. California, the boogeyman of all conservatives, added a respectable 5.4 percent.
By contrast, deep-red Mississippi saw only 0.7 percent population growth during this period and West Virginia lost 1.2 percent.
But it’s undeniable that Sun Belt states, mostly red, with the promise of warm weather as well as abundant land and no growth boundaries, see the most growth in people. Texas grew by 10.8 percent and Arizona, despite being an epicenter of the housing crash, increased by 8.4 percent.
Are people voting with their feet? It’s difficult to tell.
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Some are no doubt attracted to red-state politics. In recent decades, we’ve seen what journalist Bill Bishop called “the Big Sort.” People of similar world views are increasingly congregating together.
But others are coming mainly for affordability and a sunny lifestyle. If they’re more centrist or left-of-center, they can find more attractive politics in the larger cities that are almost uniformly blue-majority.
The bootstrapping myth of red states is undone by the fact that most of them get more in federal spending than their residents pay in taxes. Arizona wouldn’t exist as a modern entity without gigantic federal investments, especially in water-reclamation projects.
To be fair, even relatively small red states have made some economic coups beyond back-office jobs, data centers and warehouses. South Carolina drew BMW in the 1990s and Boeing in 2011. Alabama hosts Airbus and auto assemblies of Mercedes, Honda and Hyundai.
Lower costs and anti-union attitudes are no doubt attractive to corporate chiefs. But government was hardly passive. Both states spent big on incentives. Also, Alabama benefits from NASA and the Army’s longstanding brainiac rocket hub in Huntsville. Most important: These wins didn’t translate into broader prosperity for the states.
Today’s degree of polarization is new and different compared to much of the 20th century.
New in that many more states were competitive for both parties and a broad political consensus held the center from the 1940s through the 1970s. Compromise was not only possible but the rule.
For example, ever-reddening Ohio once built excellent universities, parks and infrastructure under both Republicans and Democrats. Washington’s Republican Gov. Dan Evans, who served from 1965 to 1977, was a champion of environmental protection, helped create a unified community-college system and unsuccessfully sought an income tax.
Different in that both parties once had liberals, centrists and conservatives. The deep South was desperately poor under the control of segregationist Democrats, although its fortunes improved, thanks to huge New Deal investments. New York’s most audacious progressive measures in the 1960s happened under Republican Gov. Nelson Rockefeller.
So, circa 1960, we wouldn’t be having a conversation about the economic success of red vs. blue.
Then, the determining factors were more likely the centers of great manufacturing enterprises, population size, location on major rail lines and seaports, Cold War military spending and a certain amount of luck. The country had 181 million people compared with more than 326 million today, and population growth carries expenses and complications, as well as benefits.
Blue state. Red state. Among partisans, few minds will be changed by their relative economic performance. Most people are just trying to get by.
But what’s happening in Washington, D.C., especially with the destructive tax legislation, will hurt the United States of America. Or what passes for “united.”