September 22, 2008

Red State vs. Blue State Economics (NY Post Sunday Column)

Filed under: Economy,Taxes & Government — Tom @ 4:53 pm

With the New York Post’s permission, which I appreciate, I am putting up the column that appeared yesterday in the Post’s Business section.

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Red State vs. Blue State Economics

September 21, 2008

After a tough week on Wall Street and in Washington, it’s important to point out that all economic troubles are not created equal. And it is the red states that are better prepared to weather the crisis.

In Texas, Florida and Arizona, life doesn’t seem so grim. As Phil Gramm and Mike Solon noted in a Sept. 13 Wall Street Journal column, those three large states gained 1.7 million, 1.4 million, and 600,000 jobs, respectively, from 1996-2006. That’s one-third of all US jobs during that period. The states also had per-capita income growth that far outpaced the national averages.

Most other red states have done either fairly well or very well. Friday morning’s Labor Department report shows at least 15 states that went for Bush in 2004 had seasonally adjusted August unemployment rates below 5%: Alabama, Arkansas, Idaho, Iowa, Kansas, Louisiana, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, Utah, Virginia, West Virginia, and Wyoming.

But if you’re looking for economic struggles, visit the blue states.

Begin with big kahuna California, which gave John Kerry a 10% margin in 2004. The now-misnamed Golden State, with its Democrat-dominated legislature and might-as-well-be-a-Democrat governor, had an August unemployment rate of 7.7%, up from just 5.5%, and over 400,000 more unemployed workers, in 12 months. Yet Arnold Schwarzenegger rejects the idea of offshore drilling, and the jobs it will create.

Then head east to Michigan (unemployment: 8.9%; 12-month job loss: 70,000). Things have gone from bad to very bad during the tenure of Democratic Gov. Jennifer Granholm, with the help of a too-compliant GOP legislature. Wolverine State defenders point to its “unique” auto industry problems. Baloney – Gramm and Solon noted that while Michigan lost 83,000 auto-sector jobs in the past 15 years, eight Southeastern states, all of which went for Bush in 2004, gained 91,000.

Move on to Ohio (7.4% unemployment). Though it went for Bush in 2004, state government has mostly acted blue since the mid-1990s, thanks to alleged GOP governors George Voinovich and Bob Taft. The Buckeye State moved from pseudo-red to largely blue in 2006, electing a Democratic governor, who has been aided and abetted by a mostly complacent GOP legislature.

Finally, head west a bit to Obama’s Illinois (7.3% unemployment). Its Democratic governor, legislature, big-city mayor, and US senators have all played a role in creating the Land of Lincoln’s economic lousiness. Moving Democratic National Committee operations to Chicago, perhaps Obama’s most noteworthy “jobs program,” has made little difference.

Within certain states, the red-blue contrast is stark. In Ohio, you’ll find foreclosures galore and general economic malaise in bluer-than-blue Cleveland, Akron, Canton, Youngstown, Toledo, and Dayton. Meanwhile, Cincinnati and Columbus are hanging in there nicely, especially in the GOP-dominated ring suburbs. Similar comparisons apply between economically-distressed Southeastern Michigan against the rest of that state, and Metro Chicago versus much of the rest of Illinois.

If we’re in a recession, blame it on the high-tax, high-regulation, high-giveaway environments of the blue states, blue regions, and blue cities. Red states, and the red regions within otherwise blue states, made the right decisions – but will be left holding the bag.

Sadly, the blue environs of New York, New Jersey and Connecticut will most likely vote for Barack Obama. The rest of the country is already paying $1 trillion to bail out Wall Street. Must we pay for the blue states’ bad judgement as well?

Tom Blumer owns a training and development company in red-state mentality suburban Cincinnati. He runs BizzyBlog.com and writes for PajamasMedia.com.

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1 Comment

  1. For some of us, you have just elaborated on a well known fact. Obviously, basic economics is not a subject which is widely understood because the “blues” continue to vote for Dems. If such simple concepts as supply and demand, taxation is an expense on an economy, the actual meaning of the commerce clause, etc., etc., are to penetrate the electorate somebody has to figure out a way to disseminate this information in a digestible form. Until then, Bush will be blamed and Obama will win the election.

    Comment by boqueronman — September 22, 2008 @ 8:19 pm

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