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The Politics of Growth

The widening divide between fast-and slow-growing states us shaping presidential preferences

September 17, 2000|David Friedman | David Friedman, a contributing editor to Opinion, is a Markle senior fellow at the New America Foundation

With remarkable clarity, this year's presidential campaign exposes the stark regional conflicts shaping U.S. politics. The country's fastest-growing states overwhelmingly favor Texas Gov. George W. Bush, while the poorest economic performers support Vice President Al Gore. Undecided "battleground" constituencies are, almost without exception, average-growth states.

Recent polls confirm the surprising correlation between a state's presidential preference and its economic performance. Since 1992, more than 21 million new jobs have been created in the United States. About half, however, were generated in 22 fast-growing Southern and intermountain Western states, including Texas, Georgia, Utah, Colorado, Arizona and Nevada, where barely one-quarter of the U.S. population resides.

Bush's support is overwhelmingly concentrated in those states. On average, they grew by more than 3.4% a year, 60% faster than the rest of the country. Fifteen of the nation's fastest-growing 20 states over the last decade currently support the GOP nominee.

In contrast, Gore's political base is almost exclusively drawn from the nation's slowest-growing, heavily urbanized states, including New York, Connecticut, New Jersey and California. On average, these states grew by 1.8% a year and produced only 30% of the nation's new jobs even though they contain half the country's population. Eight of the nation's 10 economically worst-performing states since 1992 lean toward Gore.

The economies of battleground states, including Florida, Michigan, Missouri and Washington, grew by about 2.7% a year since 1992, almost exactly the national average. They generate nearly one-quarter of U.S. employment and account for roughly the same proportion of new jobs.

Ironically, if the election were held today, states that benefited most from the decade's booming economy would overwhelmingly reject the candidate of the party under which they flourished. Those that did the worst, however, would opt for more of the same. And the country's average-performing states are up for grabs.

What explains this correlation?

In the absence of a universally popular candidate, the country's historic cultural and economic regional divisions are playing a greater role in determining November's vote. During the 1990s, as the performance gap between the nation's slow- and fast-growth states widened, so did the divisions between their underlying politics.

Slow-growth states are strong Gore supporters because a more regulated, less robust economy best suits the constituencies that control the country's urbanized communities. Most, like New York or the Bay Area, share common histories of rapid industrialization, economic conflict and grinding decline. These experiences generated support for government to soften economic hardship and mediate between the haves and have-nots. Later, as new advocacy groups emerged, the scope of regulation was broadened to include noneconomic concerns like ethnic and environmental issues.

The politics and demographics of slow-growth regions were profoundly affected because, over time, high-end development pursued by the wealthy or well-connected--such as big-ticket stadium projects and large, urban, mixed-use projects backed by influential investors and corporations--stood the best chance of navigating the growing maze of bureaucratic and interest-group constraints. Overall, economic activity fell in slow-growth regions, but the costs of scarce housing, land, commercial properties and other urban amenities soared. Paradoxically, regulation greatly enhanced the already considerable power and wealth of urban elites.

In return, the privileged in places like Los Angeles' Westside, Manhattan and San Francisco were willing to pay higher taxes and live with a more intrusive government as long as it kept the peace and their assets appreciated in value. To achieve this, most slow-growth regions developed an elaborate system of transfer payments for "targeted" recipients chosen by government. These ranged from high-tech companies frantically courted and subsidized by urban governments to public-works projects to social programs aimed at appeasing high-profile ethnic-advocacy groups. The result is the 1990s-style urban economy: relatively slow growing; a burgeoning super-rich and the high-end amenities they desire; a large public bureaucracy; and targeted intervention to ameliorate potential social conflicts.

This strategy, however, sacrificed businesses and families that depend on reasonable costs of living and that were not favored with targeted government assistance. During the 1980s and 1990s, the white middle class and manufacturing enterprises were particularly hard-hit. As a result, inequality skyrocketed in the country's slow-growth regions. Yet, because disaffected groups usually gave up and left rather than fight against the political tide, slow-growth regions brokered a more or less stable social compromise among their remaining residents.

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