The New Economy and the Trump Economic Rump

A billboard in West Des Moines, Iowa, in January 2016.

Time and time over the years I have argued that rural areas that reject modernity, cling to right wing Christianity and remain outwardly racist are cutting their own throats economically and thriving businesses increasingly locate in urban and/ suburban areas that offer better educated work forces and are more hostile to racial bigotry and religious extremism.  Here in Virginia, both the McAuliffe and now the Northam gubernatorial administrations have pushed a "welcoming to all" effort to attract new businesses to the state.  Sadly, it's a hard sell to parts of Virginia like Southwest Virginia or the area along the southern border from Emporia westward where racism and right wing religion predominate.   Yet, as a column in the New York Times lays out, right wing Republican areas are slowly dying - in no small part because of their hostility to diversity and political liberalism.  The recent announcement by Amazon of its new headquarters locations and the results of the 2018 midterm elections underscore the argument of the column.  Here are column highlights:   

A little over a year ago, Amazon invited cities and states to offer bids for a proposed second headquarters. This set off a mad scramble over who would gain the dubious privilege of paying large subsidies in return for worsened traffic congestion and higher housing prices. (Answer: New York and greater D.C.)

But not everyone was in the running. From the beginning, Amazon specified that it would put the new facility only in a Democratic congressional district.

O.K., that’s not literally what Amazon said. It only limited the competition to “metropolitan areas with more than one million people” and “urban or suburban locations with the potential to attract and retain strong technical talent.” But in the next Congress the great majority of locations meeting those criteria will, in fact, be represented by Democrats.

Over the past generation, America’s regions have experienced a profound economic divergence. Rich metropolitan areas have gotten even richer, attracting ever more of the nation’s fastest growing industries. Meanwhile, small towns and rural areas have been bypassed, forming a sort of economic rump left behind by the knowledge economy.

Amazon’s headquarters criteria perfectly illustrate the forces behind that divergence. Businesses in the new economy want access to large pools of highly educated workers, which can be found only in big, rich metropolitan areas. And the location decisions of companies like Amazon draw even more high-skill workers to those areas.

In other words, there’s a cumulative, self-reinforcing process at work that is, in effect, dividing America into two economies. And this economic division is reflected in political division.

In 2016, of course, the parts of America that are being left behind voted heavily for Donald Trump. . . . . But this was, it turns out, fighting the last war. Trumpism turned America’s lagging regions solid red, but the backlash against Trumpism has turned its growing regions solid blue.

Why have lagging regions turned right while successful regions turned left? It doesn’t seem to be about economic self-interest. True, Trump promised to bring back traditional jobs in manufacturing and coal mining — but that promise was never credible. And the orthodox Republican policy agenda of cutting taxes and shrinking social programs, which is basically what Trump is following in practice, actually hurts lagging regions, which depend a lot on things like food stamps and disability payments, much more than it hurts successful areas.

As documented in “Identity Crisis,” an important new book analyzing the 2016 election, what distinguished Trump voters wasn’t financial hardship but “attitudes related to race and ethnicity.”

Yet these attitudes aren’t divorced from economic change. Even if they’re personally doing well, many voters in lagging regions have a sense of grievance, a feeling that they’re being disrespected by the glittering elites of superstar cities; this sense of grievance all too easily turns into racial antagonism. Conversely, however, the transformation of the G.O.P. into a white nationalist party alienates voters — even white voters — in those big, successful metropolitan areas. So the regional economic divide becomes a political chasm.

We can and should do a lot to improve the lives of Americans in lagging regions. . . . . . But restoring these regions’ dynamism is much harder, because it means swimming against a powerful economic tide.

And the sense of being left behind can make people angry even if their material needs are taken care of. That is what we see, for example, in the former East Germany . . .

So the bitter division we see in America — the ugliness infecting our politics — may have deep economic roots, and there may be no practical way to make it go away.

But the ugliness doesn’t have to win. Most rural white voters still support Trumpism, but they aren’t a majority, and in the midterms a significant number of those voters also broke with the white nationalist agenda. . . . the better angels of our nature can still prevail.

Richard Florida who coined the term the "creative class" also noted that the more accepting a city of region was of gays, the stronger its technology based economy (Florida called this the "gay index").  If one looks at the economically lagging red states - or regions of Virginia - the common thread is that they are anti-gay and racist.   These aren't traits forced on them by outsiders.  Rather, it is the inbred bigotry and right wing religious extremism of the local populace which is the root of the problem.  True, Republicans play to these prejudices to win votes, but in doing so, they and those who vote for them are merely making the downward economic spiral accelerate.  Blacks and Hispanic immigrants are not the source of these regions' economic problems.  If they want to see the real cause, the locals need only look in the mirror.