“Wrong Way Nation”: The Growth Of The Sunbelt Isn’t The Kind Of Success Story Conservatives Would Have Us Believe
Gov. Rick Perry of Texas is running for president again. What are his chances? Will he once again become a punch line? I have absolutely no idea. This isn’t a horse-race column.
What I’d like to do, instead, is take advantage of Mr. Perry’s ambitions to talk about one of my favorite subjects: interregional differences in economic and population growth.
You see, while Mr. Perry’s hard-line stances and religiosity may be selling points for the Republican Party’s base, his national appeal, if any, will have to rest on claims that he knows how to create prosperity. And it’s true that Texas has had faster job growth than the rest of the country. So have other Sunbelt states with conservative governments. The question, however, is why.
The answer from the right is, of course, that it’s all about avoiding regulations that interfere with business and keeping taxes on rich people low, thereby encouraging job creators to do their thing. But it turns out that there are big problems with this story, quite aside from the habit economists pushing this line have of getting their facts wrong.
To see the problems, let’s tell a tale of three cities.
One of these cities is the place those of us who live in its orbit tend to call simply “the city.” And, these days, it’s a place that’s doing pretty well on a number of fronts. But despite the inflow of immigrants and hipsters, enough people are still moving out of greater New York — a metropolitan area that, according to the Census, extends into Pennsylvania on one side and Connecticut on the other — that its overall population rose less than 5 percent between 2000 and 2012. Over the same period, greater Atlanta’s population grew almost 27 percent, and greater Houston’s grew almost 30 percent. America’s center of gravity is shifting south and west. But why?
Is it, as people like Mr. Perry assert, because pro-business, pro-wealthy policies like those he favors mean opportunity for everyone? If that were the case, we’d expect all those job opportunities to cause rising wages in the Sunbelt, wages that attract ambitious people away from moribund blue states.
It turns out, however, that wages in the places within the United States attracting the most migrants are typically lower than in the places those migrants come from, suggesting that the places Americans are leaving actually have higher productivity and more job opportunities than the places they’re going. The average job in greater Houston pays 12 percent less than the average job in greater New York; the average job in greater Atlanta pays 22 percent less.
So why are people moving to these relatively low-wage areas? Because living there is cheaper, basically because of housing. According to the Bureau of Economic Analysis, rents (including the equivalent rent involved in buying a house) in metropolitan New York are about 60 percent higher than in Houston, 70 percent higher than in Atlanta.
In other words, what the facts really suggest is that Americans are being pushed out of the Northeast (and, more recently, California) by high housing costs rather than pulled out by superior economic performance in the Sunbelt.
But why are housing prices in New York or California so high? Population density and geography are part of the answer. For example, Los Angeles, which pioneered the kind of sprawl now epitomized by Atlanta, has run out of room and become a surprisingly dense metropolis. However, as Harvard’s Edward Glaeser and others have emphasized, high housing prices in slow-growing states also owe a lot to policies that sharply limit construction. Limits on building height in the cities, zoning that blocks denser development in the suburbs and other policies constrict housing on both coasts; meanwhile, looser regulation in the South has kept the supply of housing elastic and the cost of living low.
So conservative complaints about excess regulation and intrusive government aren’t entirely wrong, but the secret of Sunbelt growth isn’t being nice to corporations and the 1 percent; it’s not getting in the way of middle- and working-class housing supply.
And this, in turn, means that the growth of the Sunbelt isn’t the kind of success story conservatives would have us believe. Yes, Americans are moving to places like Texas, but, in a fundamental sense, they’re moving the wrong way, leaving local economies where their productivity is high for destinations where it’s lower. And the way to make the country richer is to encourage them to move back, by making housing in dense, high-wage metropolitan areas more affordable.
So Rick Perry doesn’t know the secrets of job creation, or even of regional growth. It would be great to see the real key — affordable housing — become a national issue. But I don’t think Democrats are willing to nominate Mayor Bill de Blasio for president just yet.
By: Paul Krugman, Op-Ed Columnist, The New York Times, August 24, 2014
“The GOP’s Libertarian Time Bomb”: Why ‘Going Rand’ Would Be An Electoral Disaster
The time has come again for a perennial theme in politics: the idea that Republicans should “go libertarian.” The questionable premise, forwarded most recently by Robert Draper and Emily Ekins, is that the Republican Party could sweep up millennials, who are “socially liberal” and “economically conservative,” by adopting a more libertarian message. The ascent of popular startups like Uber and Airbnb — which have about them a decidedly libertarian flavor — has only strengthened this supposedly conventional wisdom.
Here’s the thing, though. The data show that this is an unlikely possibility, but more problematically, doing so would actually decimate the Republican base. The truth is, libertarianism is antithetical to conservatism.
The Republican base, broadly speaking, is made up of five often-overlapping coalitions: business conservatives who seek low taxes and low regulation; foreign policy hawks who seek a strong defense budget; social conservatives who fear moral anarchy; racists and nativists worried about immigration and affirmative action; and elderly retirees who rely on Social Security and Medicare. This coalition is already difficult enough to maintain, but in the future it will become more difficult.
And a “libertarian” message would only further erode the base.
Business conservatives seem like they would be the most open to a libertarian message. After all, lower taxes and less regulation are amenable to both groups. But Republicans are already very pro-business and anti-regulation; to go further in order to pull in a few more libertarians would entail (1) decreased fiscal or monetary intervention, or (2) the elimination of corporate subsidies. Both of these moves would alienate business conservatives, who, after all, rely significantly on government support (to the tune of $92 billion in 2006) and accept the need for countercyclical spending policies. Libertarians might struggle to support Republicans doling out farm subsidies year after year, subsidizing exports and bailing out big businesses and banks, but business conservatives demand it.
Foreign policy hawks would also find many of the core tenets of libertarianism — skepticism of foreign interventionism, opposition to the NSA and a healthy loathing of the military-industrial complex — to be problematic. Republicans could try to peel off support among libertarians by opposing torture, closing Guantanamo and investigating the NSA, but it’s tough to believe that the party of Bush, Cheney, Wolfowitz and Rumsfeld would be able to garner much trust. The swift turn of Rand Paul from libertarian anti-interventionist to foreign policy hawk attests to the difficulty in going this route.
Social conservatives would likely be the most difficult challenge to libertarians. Libertarians tend to support individual liberty:the right to gamble, drink, smoke, watch pornography, take one’s own life, participate in any form of sexual activity and use drugs. Needless to say, these views would be incredibly problematic for the moral majority coalition, which still forms an incredibly important part of the Republican base. It was Hayek who wrote in “Why I’m Not A Conservative”: “The conservative does not object to coercion or arbitrary power so long as it is used for what he regards as the right purposes… like the socialist he regards himself as entitled to force the values he holds onto other people.”
While it’s often considered impolite to note in public, a rather significant base of Republican power is still nativism. Witness the hysterical response to Central American refugees, the baseless claims against Obama’s citizenship, and the opposition to any immigration reform that doesn’t include a moat full of crocodiles across the border. But most libertarians are strongly supportive of open borders. Libertarian economist Bryan Caplan calls it, “The Efficient, Egalitarian, Libertarian, Utilitarian Way to Double World GDP.” In a world when even the “reasonable” Republicans are still spouting xenophobic drivel, witness Ross Douthat’s column worrying that “the bills under discussion almost always offer some form of legal status before enforcement takes effect, which promises a replay of the Reagan-era amnesty’s failure to ever deliver the limits on future immigration that it promised.”
Finally, there are the elderly retirees, whose support Republicans maintain by making sure that any spending cuts fall on the backs of the poor – not the old. One wonders how they would receive the Cato Institute plan to turn Social Security into private savings accounts subject to market forces. Many would balk if a politician called Social Security “federally mandated generational theft,” but this is how Nick Gillespie regards it. Social Security and Medicare are sacrosanct and any attempt to reform them is likely a “third rail” that would lead to electoral death for the politician that tried.
The problem with libertarianism is mainly that few people agree with its ideological assumptions — but will often come to the same political answer. But this means that most people will be “libertarian” on some issues, rather than use a libertarian mode of thinking to get there. So people may be programmatically libertarian, but ideologically disagree with fundamental assumptions. As political scientist Seth Masket writes, “Basically everyone agrees with libertarians on something, but they tend to get freaked out just as quickly by the ideology’s other stances.”
These contradictions are obvious, and Draper’s widely discussed piece touches on some of them. For instance, there is Mollie Hemingway, who claims to be a libertarian, but is anti-choice and rejects gay marriage. She argued that although “‘people should be free to organize their own lifestyle,’ the state had a unique interest in protecting heterosexual marriage, because it was ‘the relationship that’s ordered to producing children.’” She might want to turn to Ayn Rand, who argued that, “but it is improper for the law to interfere with a relationship between consenting adults” and noted that “abortion is a moral right — which should be left to the sole discretion of the woman involved; morally, nothing other than her wish in the matter is to be considered. Who can conceivably have the right to dictate to her what disposition she is to make of the functions of her own body?”
Or what of Murray Rothbard’s claim that “the parent should not have a legal obligation to feed, clothe, or educate his children, since such obligations would entail positive acts coerced upon the parent and depriving the parent of his rights. The parent therefore may not murder or mutilate his child, and the law properly outlaws a parent from doing so. But the parent should have the legal right not to feed the child, i.e., to allow it to die.” Hemingway is a programmatic libertarian — she likes some proposals, but rejects the radical individualism libertarianism truly entails.
And those are on the issues where Republicans are supposed to agree with Libertarians. Nick Gillespie touches on the minor contradictions in an interview for Draper’s piece:
Republicans always saw libertarians as nice to have around in case they wanted to score some weed, and we always knew where there was a party. And for a while it made sense to bunk up with them. But after a while, it would be like, ‘So if we agree on limited government, how about opening the borders?’ No, that’s crazy. ‘How about legalizing drugs? How about giving gays equal rights?’ No, come on, be serious. And so I thought, There’s nothing in this for me.
He leaves some equally problematic things out: legalized prostitution, restrained foreign policy, massive defense cuts, abolishing social security and Austrian economics. None of these will curry favor with the Republican establishment. The question is not whether there are a large number of Americans who would be excited by libertarianism; the question is whether the Republicans could maintain their current coalition and also court these voters — this seems unlikely.
Then there’s the fact that Rand Paul, once an ardent libertarian, has had to step back on numerous positions. There’s the fact that Gary Johnson alienated the base and Ron Paul looked loony in 2012, opposing the Iraq War, calling for an end to the federal reserve and arguing that the government should legalize all drugs. Ronald Reagan, who successfully used libertarian rhetoric (see: A Time for Choosing) eschewed it when governing. The Republican Party has long used libertarian rhetoric while pursuing statist policies. The Mercatus Center, a libertarian think tank, ranks the 50 states based on “freedom,” but weights “tax burden” as 28.6% of the metric and “freedom from tort abuse” as 11.5%, while “civil liberties” only account for 0.6% of a state’s score and “education policy” 1.9%. In Mercatus-land, alcohol, gun and cigarette freedom rank above marriage freedom, and abortion goes unmentioned. A libertarian turn for conservatives would be nice — libertarians actually hold the free market views conservatives claim and actually accept the importance of reason and individual liberty. But this is the reason it will never happen: True libertarianism would decimate the Republican base, so instead a half-hearted libertarianism prevails — stripped of policies, it subsists on empty rhetoric. But then again, the last few Republican rebranding efforts have been empty rhetoric, and so will this one.
By: Sean McElwee, Salon, August 23, 2014
“Republicans Have A Choice”: Their Donors, Their Right-Wingers, Or A Government Shutdown
It looks like the one big(gish) substantive consequence of Eric Cantor’s exit from the House Republican leadership will be the demise of the Export-Import bank. Or at least it looks very likely that John Boehner (who supports the Export-Import bank) will allow its authorization to lapse rather than pick a fight with conservative hardliners in the House.
The fact that the bank’s authorization expires on the same day that federal appropriations expire has analysts wondering whether it will end up at the center of a tug-of-war over funding the government, precipitating a shutdown. And that, in turn, has conservatives salivating over the prospect of “Democrats shut[ting] down the government” to protect corporate welfare.
First, allow me to disclose that I really don’t care very much what happens to the Export-Import bank, which subsidizes U.S. exports with loans and loan guarantees to insure against non-payment by importers. I guess the one convincing argument for reauthorizing it temporarily, or reforming and reauthorizing it, is that it probably is providing a modest boost to the economy at the moment, but generally liberals and hardline conservatives agree, for slightly different reasons, that the bank should go. Establishment Republicans, by contrast, really like the Ex-Im bank, which explains why Democrats are happy to set aside whatever misgivings they might have about it in order to exploit the division within the Republican conference.
That division is also why any talk of Democrats shutting down the government to protect Ex-Im is basically dishonest spin.
I think there’s almost no chance anyone will shut down the government over the Ex-Im bank, but if a shutdown happens, it will come as a consequence of Boehner wimping out, not of anything Democrats might do.
To my mind, there are at least four ways a fight over Ex-Im could play out within a fight over funding the government. Half of them end with the elimination of the Ex-Im bank. Only one ends with a government shutdown, and it would be on House Republicans.
I’ve simplified the processes involved here, for the sake of clarity, but in order of escalating complexity, the scenarios are as follows:
1. The House passes a bill to fund the government and sends it to the Senate, where Republicans successfully filibuster any attempt to reauthorize the Ex-Im bank. Harry Reid caves. Result: Ex-Im bank eliminated.
2. The House passes a bill to fund the government and sends it to the Senate where Democrats and Republicans tweak it to reauthorize the Ex-Im bank, among other things. It goes back to the House, where Boehner “caves” and puts it on the floor. Result: Ex-Im bank survives.
2a. The House passes a bill to fund the government and sends it to the Senate where Democrats and Republicans amend it to reauthorize the Ex-Im bank. It goes back to the House, where Boehner allows a vote on a measure to strip the Ex-Im authorization out of the legislation, but the measure fails thanks to the support of an overwhelming number of Democrats and a large contingent of Republicans. Result: Ex-Im bank survives, Republicans crow disingenuously about how Democrats are the real crony-capitalists.
3. The House passes a bill to fund the government and sends it to the Senate where Democrats and Republicans amend it to reauthorize the Ex-Im bank. It goes back to the House, where Boehner can neither muster the nerve to affirmatively strip the authorization (and anger donors) nor the nerve to put the whole bill on the floor (and anger conservatives). So he does nothing. Result: Boehner shuts down the government, Ex-Im bank in limbo.
4. The House passes a bill to fund the government and sends it to the Senate where Democrats and Republicans amend it to reauthorize the Ex-Im bank. It goes back to the House, where Boehner chooses his speakership over his big business allies, and rounds up Republican votes to strip the authorization out of the bill. The House sends the bill back to the Senate where Reid caves. Result: Ex-Im bank eliminated.
Note, I have baked into these scenarios an assumption that Senate Democrats won’t refuse to fund the government unless the Ex-Im bank survives because most Democrats a) Don’t really care that much about the bank, b) are mainly just interested in exploiting Republican divisions, c) want to make a point to conservative big business donors about the incredibly bad investment they’ve made in House Republicans, and d) aren’t an inherently reactionary bunch like their counterparts in the House GOP.
For what it’s worth, I think option 2a is the kabuki show we’re most likely to see. I think the GOP leadership’s overweening interest in not shutting down the government will carry here, which means scenario 3 is the least likely. But either way, Boehner and Mitch McConnell will have to make some fairly consequential decisions in the next few months.
By: Brian Beutler, The New Republic, June 27, 2014
“The Return To The Roaring 20’s”: The Typical Member Of The 1 Percent Is An Old White Man
The rich are not like you and I.
It’s no secret that income inequality has been growing rapidly, with most the gains in earnings accruing to just the top one percent of Americans. But who are they? A new paper from Lisa A. Keister at Duke University looks at this question and finds that “members of the one percent are disproportionately male, white, and married.” The typical one percenter is 55, compared to about 50 for the bottom 90 percent. The one percent is about 91 percent white — just 1.8 percent of these households are Hispanic and merely 0.2 percent are black. More than half are married, versus about 30 percent for the bottom 90 percent. They are also much more likely to have a graduate degree: about 62 percent have one, compared to less than 10 percent of the bottom 90 percent.
Gender is a little harder to tease out, because the data looks at heads of households and classifies a family with a husband and wife where the husband is the head as male, so the fact that the one percent show up as about 98 percent male doesn’t mean that some rich women aren’t included. But it’s clear that few single mothers or female breadwinners are making it into this group. And we can also look at the job characteristics of the top earners to get a better sense of gender. As Mike Konczal has pointed out, the top one percent is mostly made up of executives, people who work on Wall Street, and managers. Women make up less than 15 percent of executives, while they represent 35 percent of investment banking employees and 40 percent of employees in the broader “Securities, Commodity Contracts and Other Financial Investments” category.
The 1 percent are also different in how they get their money. For the bottom 90 percent, 70 percent of our incomes from wages or salaries. But for the top 1 percent, salary accounts for just half. On the other hand, more than 30 percent of their money comes from businesses, while just 6.1 percent of the money for the bottom 90 percent is from the same source. While the 1 percent holds most of its assets in businesses, for the rest of us our houses are the most commonly held asset. The 1 percent also dominates financial assets, owning nearly 44 percent of the total financial pie, while the bottom 90 percent gets 20 percent.
And while we know that the wealthiest have been gobbling up most of the country’s income — the top 5 percent got the biggest share of income ever recorded in 2012, and the top 1 percent saw a 278 percent increase in their incomes over the last three decades while the middle saw less than a 40 percent bump — wealth concentration may be even worse. Keister’s paper finds that the 1 percent in wealth has held more than one-third of total net worth since 2001 and by 2010 had 34 percent. The bottom 90 percent, on the other hand, is left with just over a quarter of wealth. Wealth inequality is now as bad as it was during the roaring 1920s.
By: Bryce Covert, Think Progress, May 2, 2014
“Rhetoric Won’t Patch The GOP Up”: It’s Hard To Patch Things Up When You Have Diametrically-Opposed Goals
Over at the National Review Kevin Williamson has penned a column we are all familiar with. It’s a rallying cry for conservatives to get over their differences and rally behind the Republican Party. In the aftermath of the 2004 presidential election, there were countless articles of this type written by pragmatic liberals. All you have to do is reverse the names, and it looks completely familiar.
And though I reject the notion that Mitt Romney wasn’t good enough for true-believing conservatives, let’s say, arguendo, that that was the case. Unless you are ready to give up entirely on the notion of advancing conservative principles through the ballot box, you might consider looking at things this way: Even if you do not think that it matters much whether Republicans win, it matters a great deal that Democrats lose.
Maybe you were not that excited that 2012 gave you a choice between Mitt Romney and Barack Obama. I sympathize — I liked Rick Perry. But how is President Romney vs. President Obama a hard choice? How is Senate Majority Leader Mitch McConnell vs. Senate Majority Leader Harry Reid a hard choice? How is Speaker of the House John Boehner vs. Speaker of the House Nancy Pelosi a hard choice?
It isn’t.
I don’t think these types of columns are ever very convincing, but that doesn’t mean that they are incorrect. If we were to give this genre a name, it would be Vote-for-the-lesser-evil essays. They don’t exactly get people fired up and ready to go.
And it’s not a great sign that people feel that they are necessary to write because it indicates that there are some rather strong divisions. Back in the 2005-6 period, Democrats became unified, and they did an adequate job of patching things up after the 2008 primaries. The divisions among Republicans are more fundamental. There’s a glaring generation gap on gay rights. There’s a yawning gulf between the businessmen who want comprehensive immigration reform and the nativist base that wants an end to all non-white immigration, whether it is legal or illegal. There’s a growing chasm between the libertarian non-intervention wing of the party and the John McCain bomb-em-first-ask-questions-later wing of the party. There’s also a Main Street/Wall Street divide over tax policy and social/religious issues.
In all these cases, important factions within the GOP simply want different things. It’s hard to patch things up when you have diametrically-opposed goals.
Interestingly, Mr. Williamson says he quit his membership in the Republican Party during the Bush years because he couldn’t abide belonging to the same club as Arlen Specter. He also says that “the Affordable Care Act, [is] the worst domestic defeat for the cause of limited government in a generation,” which is a nice admission. It shows the real reason that conservatives keep bad-mouthing a law that is working very well and is already covering seven million people. We can understand, now, why conservatives have fought the law with so much fury. They believe, correctly, that the mere existence of the law is a tremendous ideological defeat. Whether it works well or not is completely beside the point for these folks.
Going forward, that’s going to be an increasingly suicidal political position to take. There will be divisions on that, too.
By: Martin Longman, Washington Monthly Political Animal, March 30, 2014
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