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Message
re: Why are certain red states poor compared with blue states.
Posted on 7/27/17 at 12:16 pm to kingbob
Posted on 7/27/17 at 12:16 pm to kingbob
quote:
It isn't directly.
Remember, metrics are often garbage in, garbage out, but we still rely on them. Many business executives only have time to look at the numbers on their face rather than dig in to see what's really beneath them.
Businesses typically look at 5 things when deciding where to move to:
1. Infrastructure
2. Availability of qualified workers
3. Proximity to customer base
4. Tax/regulatory environment
5. Quality of life for their higher-ups.
Louisiana has great canal and river infrastructure south of Baton Rouge, but there are similar competing ports in California, Texas, Mississippi, New Jersey, Virginia, Maryland, New York, and Alabama. So, any company that is interested in that port infrastructure will only pick Louisiana if it is better than all of those other states on the other metrics.
Louisiana's freight rail infrastructure is pretty decent, but so is a lot of other places, and our road infrastructure is absolutely abysmal, aspiring to 3rd world in places.
Louisiana's fiber-optic infrastructure is pretty lackluster outside of a few places (Lafayette). That really puts a damper on technology companies that can set up shop anywhere they can get an internet connection.
When they look at availability of workforce, the first thing they look at is public education rates, and our numbers are abysmal. However, if one were to remove that entitlement population, the remaining students are average at worst. That population makes the numbers look far worse than they would otherwise. They also look at the labor participation rate and see that there is a massive population of people with no education not working. That makes the rest of the state look unqualified to meet their needs.
When they look at proximity to customers, unless your customers are sugarcane farmers, oilfield, refineries, chemical plants, construction companies, or fishermen,
there's probably much higher demand for your product in nearby states with much larger populations (Texas and Florida).
When they look at quality of life for their executives, they look at crime, healthcare, things to do, and public schools. They may like the activities available in New Orleans, but much of the fun in Baton Rouge and Lafayette is kinda out of the way. Just by looking at their tourism pages, you would never know half of what is going on. Fun in Baton Rouge can often only be found by those who know where it is. Executives are only going to see "fun" in New Orleans. That's a plus relative to some other cities, but drags down the rest of the state. A lot of cities are "fun enough" for executives to live there.
What they are going to see is that everyone here is unhealthy, there's crime rates through the roof, and that executives have to send their kids to private schools. Those are big big hurdles to overcome. That means that the only chance of getting a company to come here is for Louisiana to absolutely knock it out of the park on infrastructure and tax/regulatory structure.
Our taxes suck, particularly our wonky income tax, our inventory tax, and the local corruption/permitting climate. Many companies see our tax structure as an albatross rather than a resource. See, our tax structure is designed to allow the state to allow companies with an "in" to basically pay no taxes. However, those looking from the outside just see a ton of taxes, not realizing that they may never have to actually pay any of them. The structure gives local governments and the governor the ultimate power in granting them, forcing companies to often go through multiple stages of bribes just to get anything done. This everything but straightforward climate chases away businesses in droves to other states. What political party runs these bribery apparatus? It's the same one that poor population votes for at a 95% clip.
So yes, poor populations, entitlement using populations, can drive away business, even if they are the result of businesses fleeing in the first place.
Nice analysis!
0
Posted on 7/27/17 at 12:16 pm to RIPMachoMan
quote:
So you disagree with California's ways. That's cool, but it doesn't change the fact that states closer to trickle down's end of the spectrum aren't failing.
I am not an advocate for California in any way
What are you talking about? I Merely picked California as a state that both rural and urban areas. I just as easily could have said Texas, or New York, or Florida. My post wasn't a comment about California at all.
Posted on 7/27/17 at 12:40 pm to volod
quote:
but what about the Dakotas and other Red, western states where minorities make up a very small percentage of the total population
Yeah, how are the Dakota's different economically from other areas of the country, other than their tendency to vote Republican? I mean, come on dude.
Posted on 7/27/17 at 12:43 pm to member12
quote:
Texas, IMO, is a great example of how to parlay natural resources into a thriving, diverse economy.
I identify as a Texan-American
Posted on 7/27/17 at 12:43 pm to volod
in before they blame blacks but refuse to look in the mirror
Posted on 7/27/17 at 12:45 pm to volod
Higher quality of education and labor unions.
You don't see blue state leaders going all over the world telling Capital how pliable the workforce is in their states like red state leaders do......and by pliable I mean willing to suck the dick of the boss in exchange for a job like employees in the south will
You don't see blue state leaders going all over the world telling Capital how pliable the workforce is in their states like red state leaders do......and by pliable I mean willing to suck the dick of the boss in exchange for a job like employees in the south will
Posted on 7/27/17 at 12:53 pm to ChewyDante
The economy is nothing but connecting resources with demand for those resources.
Geographic locations can build economic success by either:
A. being the location of valuable resources
B. being the location where resources are converted or processed for sale
C. being the location where resources are sold (i.e. where the demand is)
D. being the location where decisions are made about the above 3 things.
A is a product of geography.
B is largely a product of infrastructure and geography, but can be influenced by policy.
C is a product of demographics, which can be heavily influenced by policy and geography
D is purely governmental.
Local officials should try to make the best with what geography gives them in order to put themselves in the best possible position relative to other similar areas.
North Dakota has mainly two resources: large swaths of arable farmland and shale oil. The farmland has been producing at relatively the same yields as surrounding states and isn't adding any more land anytime soon. Technology has largely automated this industry, so there's no new jobs coming from ag. Shale oil was recently unlocked by new technology, causing a flood of investment when prices were high, and that investment fleeing when prices collapsed.
To keep and/or attract new business, that state has to show that what they can offer in infrastructure, policy, and quality of life is better than other places with similar makeup.
On the flip side, jobs exist purely to facilitate those functions. If automation greatly reduces the number of people needed to perform those functions, then society must create and exploit new resources in order to add more jobs. Jobs should never be the goal, only the result. Focusing on jobs is like focusing on wins. If a team does what it's supposed to do: great fundamentals, great attitude, smart strategy, makes few mistakes, attracts good talent, etc, wins will follow in good time.
Putting up arbitrary barriers to the creation of new markets (regulations, occupational licenses, certifications), granting incentives to stop working or follow the economy to new work (entitlement programs), allowing existing large companies to craft the rules in their favor (crony capitalism) and outright theft and extortion by corrupt officials (graft) just stifles innovation.
Geographic locations can build economic success by either:
A. being the location of valuable resources
B. being the location where resources are converted or processed for sale
C. being the location where resources are sold (i.e. where the demand is)
D. being the location where decisions are made about the above 3 things.
A is a product of geography.
B is largely a product of infrastructure and geography, but can be influenced by policy.
C is a product of demographics, which can be heavily influenced by policy and geography
D is purely governmental.
Local officials should try to make the best with what geography gives them in order to put themselves in the best possible position relative to other similar areas.
North Dakota has mainly two resources: large swaths of arable farmland and shale oil. The farmland has been producing at relatively the same yields as surrounding states and isn't adding any more land anytime soon. Technology has largely automated this industry, so there's no new jobs coming from ag. Shale oil was recently unlocked by new technology, causing a flood of investment when prices were high, and that investment fleeing when prices collapsed.
To keep and/or attract new business, that state has to show that what they can offer in infrastructure, policy, and quality of life is better than other places with similar makeup.
On the flip side, jobs exist purely to facilitate those functions. If automation greatly reduces the number of people needed to perform those functions, then society must create and exploit new resources in order to add more jobs. Jobs should never be the goal, only the result. Focusing on jobs is like focusing on wins. If a team does what it's supposed to do: great fundamentals, great attitude, smart strategy, makes few mistakes, attracts good talent, etc, wins will follow in good time.
Putting up arbitrary barriers to the creation of new markets (regulations, occupational licenses, certifications), granting incentives to stop working or follow the economy to new work (entitlement programs), allowing existing large companies to craft the rules in their favor (crony capitalism) and outright theft and extortion by corrupt officials (graft) just stifles innovation.
This post was edited on 7/27/17 at 12:59 pm
Posted on 7/27/17 at 1:05 pm to germandawg
quote:
You don't see blue state leaders going all over the world telling Capital how pliable the workforce is in their states like red state leaders do
That's because blue state voters don't want new jobs, or at least not enough of the ones that support the politicians they elect. They already had jobs. Blue states are blue because of 3 demos:
pensioners, those on entitlements (not just limited to red states), and cultural socialists. Cultural socialists tend to be the children of wealthy individuals and live in progressive cities. They typically work for non-profits, schools, or governmental agencies. If they start businesses, they moderate their political views overtime, but typically remain publicly committed to the socialist cause because it's what's "hip" in their community. They don't want themselves or their businesses to be ostracized.
Basically, these people aren't demanding new jobs and new investment in their states. They either already have jobs working FOR the state, don't want a job (entitlement train) or they already retired young from their job with a big fat pension. Once those groups combine to account for more than 50% of a state's population, it becomes a blue state. That's how politics works.
This post was edited on 7/27/17 at 1:09 pm
Posted on 7/27/17 at 1:12 pm to volod
quote:
In my studies of classical conservatism, I have read that conservatives are generally very pro-business. My only concern is that a conservative state (red) should have a plenthora of business or at least have coporate friendly politics.
However, in states like Louisiana and Mississippi, there is a very noticeable lack of corporations despite having multiple universities and trade schools in which a partnership could be created.
These are not the only states, consider the Dakotas, Arizona, and other western states. According to political philosophy, most red states should be prosperous like Texas. Why is the current landscape so lopsided.
These articles have given me some perspective, so is it really spending habits and low expectations that cause this problem.
Red States beginning to Grow, Blue States decliine
Why poor states are red and rich states are blue (spending habits)
You can't fault others for not being as great as Texas.
Posted on 7/27/17 at 1:15 pm to kingbob
quote:
quote:
You don't see blue state leaders going all over the world telling Capital how pliable the workforce is in their states like red state leaders do
That's because blue state voters don't want new jobs, or at least not enough of the ones that support the politicians they elect. They already had jobs. Blue states are blue because of 3 demos:
pensioners, those on entitlements (not just limited to red states), and cultural socialists. Cultural socialists tend to be the children of wealthy individuals and live in progressive cities. They typically work for non-profits, schools, or governmental agencies. If they start businesses, they moderate their political views overtime, but typically remain publicly committed to the socialist cause because it's what's "hip" in their community. They don't want themselves or their businesses to be ostracized.
Basically, these people aren't demanding new jobs and new investment in their states. They either already have jobs working FOR the state, don't want a job (entitlement train) or they already retired young from their job with a big fat pension. Once those groups combine to account for more than 50% of a state's population, it becomes a blue state. That's how politics works.
Red states are poor because the only thing they have to sale is cheap labor and WalMart is the only example of a business model that is sustainable which is solely based on having lower prices.
Posted on 7/27/17 at 1:17 pm to redneck hippie
quote:
it's not like there any black folk north of I-20. Cleveland OH is practically all white
Are you seriously going to use Cleveland, OH as your example ?
Posted on 7/27/17 at 1:18 pm to TeLeFaWx
The facts are (real not alternative) that most red states are net takers and most blue states are net givers. A net taker gets more money from the Feds than the Federal Govt gets from the state in taxes and the opposite is true for net givers. It is also a fact that the less than 500 counties that voted Clinton in 2016 produced 64% of US GDP in 2015 and the more than 2600 that voted for Trump produced 36%.
Posted on 7/27/17 at 1:26 pm to reboil
quote:
The facts are (real not alternative) that most red states are net takers and most blue states are net givers. A net taker gets more money from the Feds than the Federal Govt gets from the state in taxes and the opposite is true for net givers. It is also a fact that the less than 500 counties that voted Clinton in 2016 produced 64% of US GDP in 2015 and the more than 2600 that voted for Trump produced 36%
Pulling these numbers by state is disingenuous and only done that way to fit a narrative. Break the numbers down by country/parish and it'll give you a clearer picture.
No red state policy is going to turn Huntsville, AL into New York City.
There are many southern states that have respectable numbers when you remove their blue areas from the equation. How do you explain that?
Posted on 7/27/17 at 1:30 pm to skullhawk
quote:
Pulling these numbers by state is disingenuous and only done that way to fit a narrative. Break the numbers down by country/parish and it'll give you a clearer picture. No red state policy is going to turn Huntsville, AL into New York City. There are many southern states that have respectable numbers when you remove their blue areas from the equation. How do you explain that?
That's why I also listed the GDP numbers broken done by county. Did you not read that part?
Posted on 7/27/17 at 1:32 pm to germandawg
quote:
Red states are poor because the only thing they have to sale is cheap labor and WalMart is the only example of a business model that is sustainable which is solely based on having lower prices.
You have that backwards.
Poor states have cheap labor because they are poor.
Cheap labor does not result in poor states.
Posted on 7/27/17 at 1:38 pm to reboil
quote:
That's why I also listed the GDP numbers broken done by county. Did you not read that part?
I addressed that with my NYC point. You throw that in the blue and the "takers", as you call them, have no chance to catch up with that. Same goes for LA area. You have $100 million homes 20 minutes from 5 generations of abject poverty.
You try to spin the numbers making it seem like liberal policies somehow created these massive wealth centers. At the same time, painting recently red states as takers when it's the blue areas within those states that cause this imbalance. It's dishonest.
Posted on 7/27/17 at 1:38 pm to germandawg
quote:
Red states are poor because the only thing they have to sale is cheap labor and WalMart is the only example of a business model that is sustainable which is solely based on having lower prices.
No, they have a ton of raw materials to sell in addition to cheap labor. However, automation means that exploiting those raw materials simply doesn't take all that many bodies anymore. The jobs are in deciding how those goods are dealt with and converting those raw materials into manufactured goods. These red states (other than Texas and Virginia) are pretty far from where decisions are being made, so they can only really expand their economies by doing more of the manufacturing of raw materials. However, automation has made it where those big factories aren't adding tens of thousands of jobs anymore, only dozens. The reality is that we simply do not need that many people to harvest, process, transport, and sell goods these days. Most of the people-oriented jobs are in marketing, designing the packaging, making decisions, and regulatory compliance. Those things are going to happen in the big markets near government decision-makers and stock/commodities market exchanges.
No, what determines how "poor" a state is is its percentage of people on entitlements. The more people on entitlements, the more poor your state will be on government metrics that do not quantify entitlement benefits as a part of income. What skews the metrics is not how much you have or how much you produce, but what percentage of your population is counted as a zero.
Outside of the large cosmopolitan cities, most of the world's economy is resource based. The more rural you are, the more resource dependent you are because there's not enough concentrated consumers to rely on a consumerist economy. In most rural areas, the resources are either mining (including oil & gas) or agriculture (including timber). In the cosmopolitan cities, the economy is based on selling those resources (shopping malls, supermarkets, and retail), speculating those resources (stock markets and commodities exchanges), or making decisions on those resources (government and corporate offices).
Automation has really hit both sides of the equation hard. However, when automation eliminates jobs in the cities, entitlements fill the void and municipal services keep people's lives going. In rural areas, job loss forces people to flee to cities, causing a brain drain, stretching local resources further, and destroying their ability to provide even basic services.
Since large cities (primarily on the coasts) make most of the decisions, they have all of the decision-making jobs. The decision-making jobs are where the wealth is. As automation eliminates the need for low-skilled labor, decisions are increasingly more centralized. Instead of there being a shop in every town, there was an office in every state, then one in each region. Now, there's maybe 3 or 4 offices for the whole country (Chicago, California, New York, and DC) or just one. That means there's less jobs in Jackson, Memphis, Baton Rouge, St. Louis, and other smaller cities as decisions become more centralized. With fewer decision-makers comes fewer consumers. With fewer consumers, there's less money around to be consumed, fewer stores employing people, fewer taxes to support municipal services, etc until the whole thing tailspins.
Conservative policy is all about policy that allows the economy to meet its natural free market level and grow organically from the supply side on down to demand. Liberal policy is all about using metrics and subsidies to artificially engineer demand and hope that supply catches up as a response (but then crony capitalists buy off politicians to keep that from happening, resulting in higher prices). It all looks good until the moment it collapses and the market finds its natural bottom, and liberal policy keeps it there.
Conservative policy is to not use steroids, eat right, and exercise.
Liberal policy is to use steroids, never exercise, and eat like shite. Sure, you'll look good in the short term, but it catches up to you later and damages you permanently.
The poorest of red states (Arkansas, Louisiana, Alabama, Mississippi) have only been barely red since 2000. They had been blue since 1877. It's going to take a lot more time to undue the damage.
This post was edited on 7/27/17 at 3:40 pm
Posted on 7/27/17 at 1:39 pm to reboil
quote:
The facts are (real not alternative) that most red states are net takers and most blue states are net givers. A net taker gets more money from the Feds than the Federal Govt gets from the state in taxes and the opposite is true for net givers. It is also a fact that the less than 500 counties that voted Clinton in 2016 produced 64% of US GDP in 2015 and the more than 2600 that voted for Trump produced 36%.
California used to be a net taker and Texas was a net giver until like 4 years ago. I love how all these enlightened about the evils of red states never contextualize any of their bull shite.
Posted on 7/27/17 at 1:39 pm to volod
I believe a lot of it has to do with Education. Which are the best schools in the country? Stanford(California) + Ivy Leagues(New England)? Smartest kids go where the best schools are. They tend to stay there after they graduate. Look at Texas, they really didn't start to grow until they started throwing big bucks at UTexas. Lesson? Don't short change Education. I think of my graduating high school class, every one of them left the state after graduation except one who left the state after college. Only one came back after college, Bobby Jindal.
Posted on 7/27/17 at 1:41 pm to Tyrusrex
quote:
I believe a lot of it has to do with Education. Which are the best schools in the country? Stanford(California) + Ivy Leagues(New England)? Smartest kids go where the best schools are. They tend to stay there after they graduate. Look at Texas, they really didn't start to grow until they started throwing big bucks at UTexas. Lesson? Don't short change Education. I think of my graduating high school class, every one of them left the state after graduation except one who left the state after college. Only one came back after college, Bobby Jindal.
What the hell are you talking about?
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