Red State, Blue State, Old State, New State

by James A. Bacon

The American people have chosen four more years of partisan gridlock in Washington. There is a remote chance that President Obama and a Republican-dominated House of Representatives will reach a grand compromise to put the country back onto a fiscally sustainable path, but I’m not holding my breath. I foresee four more years of tribal animosity between the Donkey Clan and the Elephant Clan leading to sub-par economic growth, annual trillion-dollar deficits and a nation hurtling at an accelerating rate toward Boomergeddon. I pray that I am wrong.

Obama managed to persuade many voters that the anemic state of the economy was his predecessor’s fault. Personally, I think that he bears much of the blame for the economy’s under-performance. But reasonable people can disagree. There is only one federal government, so there are no counter factuals to prove competing claims to be right or wrong. Obama can assert, for example, that his policies “pulled the economy out of the ditch” without fear of contradiction. We cannot re-run the last four years to see how it would have performed under a different set of policies.

One place where we can conduct experiments and gain more clarity about which philosophies work is in the realm of state governance. We can say, for instance, that the Blue State governance model of higher taxes, heavier regulations and the embrace of public employee unions in places like California and Illinois drives away jobs and investment. Conversely, we can say that most economically dynamic metropolitan regions in the United States hew to the Blue State cultural model regarding culture-war issues and the environment, leading to the conclusion that culturally conservative regions lag in attracting human capital and generating new enterprises.

Die-hards at both ends of the philosophical spectrum will concede no philosophical point, but the facts on the ground will speak for themselves. If California and Illinois collapse into fiscal insolvency while states hewing to the Red State model do not, there is little left to argue about. If Alabama and Mississippi remain two of the poorest states in the country, no sophistry can wish that fact away.

Thus, the ideological battle will move to the 50 states. The laboratory of democracy is as vital as ever as a Darwinian process sorts winners from the losers. My hunch is that the most successful states will couple a Red State governance model (limited government) with a Blue State cultural model (greater sensitivity to diversity, tolerance and the environment). But that’s just a hunch. We shall see.

Many Virginians — about 49% of all voters– will be demoralized by the prospect of four more years of President Obama. We don’t have the luxury of wallowing in self pity. We need to think long and hard about what it takes to make Virginia a winner in a globally competitive knowledge economy as part of a dysfunctional nation state. We cannot cling to the past. We cannot revert to the status quo. We should focus on perfecting our very flawed governance model.

Many of the core functions of state and local government in Virginia are broken, just as they are in other states. K-12 education is not up to the task of educating all of our children with the skills they need to prosper in the knowledge economy. Higher education is increasingly unaffordable and faces an existential threat from online learning. The health care system is plagued with endemic problems that can be solved only through a focus on productivity and quality. Land use and transportation are adapted to the post World War II era of suburban sprawl, not to the economic demands and consumer preferences of the 21st century. The tax code is antiquated and riddled with loopholes. And our economic development strategy, built around corporate recruitment and tourism, is adapted to the world of the 1970s, not the 2010s.

These are not problems that can be solved with more money. We don’t have more money, and we won’t in the foreseeable future. We must re-think these institutions from the ground up. If we can resist the temptation to bog down in debates over baggy pants and trans-vaginal ultrasounds, we can revitalize these core functions of state and local government. If we do, Virginia will prosper whatever happens (or fails to happen) in Washington, D.C.

26 Responses to Red State, Blue State, Old State, New State

  1. I must suggest that you’re misreading the results of this election. In voting for the president I did not vote for gridlock. I voted for the guy who tried to find agreement. If Washington doesn’t work, it’s because elected representatives on both sides of the aisle have become so polarized and created a legislative workspace that is so toxic that they’ve lost sight of the larger good. And let’s be honest and recognize that some Republicans made it their mission to kill anything that came from the president, even if it was, as it was in many cases, their own idea they were killing.

    That it was even suggested by David Brooks that voting for Romney was a smart idea because Democrats will acquiesce to Republican more than the reverse, and that this idea was picked up by the Romney campaign as a talking point in the last weeks of the campaign was a sign of just how reprehensible and unprofessional their own behavior was. That some of the most extreme voices of the right were overthrown yesterday shows that many Americans were not fooled.

    I’ve had several conversations this morning with people who fear the world will end soon because the Obama Administration is getting in the way of business, patriotism, family values….and well, you name it. And yet not one person has been able to document how any of this is, has, or will happen.

    To ridicule the president for attributing a situation that existed when he came into office to his predecessors shows just how desperate the Republican perspective had become. If that logic had any merit, why weren’t Republicans also blaming Paul Ryan for his votes in support of raising the debt ceiling and entering into wars essentially on credit. (I know you’re a student of history, so I’m sure it has not escaped your view that the Bush Administration was the very first in American history to not create or raise taxes to pay for the war(s) it started.)

    As for Governor Romney, I might not agree with him. But I’ve no doubt he’s a decent guy and could have been a fundamentally competent president. I’m confident he means well. But he and his campaign were also fundamentally out of step with the population and culture of the United State of 2012. At no time in our national history, or any nation’s history for that matter, has any national leader moved any nation forward by looking backwards as much as the Romney campaign did. His supporters wanted “their” America back, a notion that is laughably futile and resistant to the inevitability of change and the ongoing evolution of our national democracy.

    • Chris, I’m sure that you did not vote for gridlock. I’m just saying, that’s what we’re going to get. You blame the GOP for the lack of compromise in Washington, but don’t forget Obama’s famous quote to Eric Cantor: “Elections have consequences. I won.” It takes two to compromise, and neither side was willing to.

      If my understanding of Obama is anywhere near correct, he will do everything in his power to preserve the welfare state. He’s happy to raise taxes on the rich, and he’ll trim defense spending but I can’t see him agreeing to a grand compromise that seriously dents the deficit. I hope I’m wrong, but I just don’t see it.

  2. The country is center-right but the Republicans have moved far right.

    Someone like Reagan would be a RINO now days. In 1993 they supported the individual mandate for health care – now they oppose it.
    George Bush supported Immigration reform – the party now opposes it.

    The President agreed to a sequester which was demanded by the GOP as a condition of extending the debt – and now look at their position.

    What the folks who opposed Obama should get out of this election – more than anything else is why they lost.

    We did not vote for gridlock – that’s the GOP style of governance now days if they cannot rule on their principles.

    And I’ll end this with this:

    ” The US economy is now producing 2.2% more output than before the recession, but with 3.84 million fewer workers”

    http://goo.gl/3X3LZ

    now tell me what Obama has failed to do with respect to the economy.

  3. “now tell me what Obama has failed to do with respect to the economy.”.

    Seriously?

    Output grew 2.2% in 5 years. Meanwhile, the US population is growing just under one percent per year.

    In addition, the non-transfer payment components of government spending add to GDP. So, the bailouts and stimuli have been a sizable part of Obama’s anemic growth.

    Larry, do you understand that 2.2% growth over almost 5 years fueled by debt-financed government spending sucks?

    One of us is missing something here, LarryG.

  4. Jim:

    You spend way too much time talking about states and way too little time talking about MSAs.

    For example, why has Atlanta grown into a southern powerhouse while Jackson, Mississippi has not?

    Those are the kinds of questions to ask.

  5. You have to talk about states *and* MSAs. Each MSA is unique, but it works within a legal/policy framework set by the state — especially in a Dillon Rule state like Virginia.

    • Maybe. I just see a lot of states where there are very successful MSAs and very unsuccessful MSAs – Dillon’s Rule or not. Santa Barbara, CA has 7.4% unemployment while El Centro, CA has 26.8%. In Virginia, Martinsville has 15% unemployment while Charlottesville has 5.2%.

      If states were really able to do much I guess I’d expect to see more homogeneity within each state.

      • State Governors often make a difference. And a place like NYC can thrive despite itself then can fail too for reasons, in substantial part, internal. In that regard, I am reminded of Mayor John Lindsey – what he started, a long slide, as if recall – that it took more that two decades under several Governors before thinks got turned around.

  6. DJ – the economy has grown back to the GDP that existed before the recession. what the chart shows is that GDP is continuing to grow but jobs are not. Is that a policy failure of Obama?

    at this point it becomes a parlor game of what you think it should have done instead – and how.

    this is the problem that Romney had. His “5 point plan” was five outrageously simplistic statements – like “I’ll create 12 million jobs” without a scintilla of explanation as to how other than “lowering the marginal tax rate” and getting rid of regulations and ObamaCare.

    only simpletons would accept such blather as anything of substance.

    • LarryG – if someone is 100 pounds overweight and that person lost 1 pound last year, what would you say?

      “He’s losing weight. What more can anybody ask?”. Or …
      “That isn’t nearly enough to lose over the course of a year.”.

      2.2% growth over 5 years fueled by debt driven government spending doesn’t cut it.

      Romney is irrelevant. The election is over and we’ll never know if his plans would have worked or not.

      The question is whether Obama can get GDP growth up to a 3 – 4 % PER YEAR range before he leaves office in 2016.

      His first four years don’t provide a lot of confidence on that count.

  7. Obama didn’t win this as much as Mitt and the R’s lost it.

    Mitt lost the Latino vote 75-25. I imagine the African American vote was similar. There really aren’t any excuses. What are the R’s gonna do next time, spend more money? They out spent the D’s in most races and still lost, particularly if you count the funny money. What a phenomenal waste of resources that could have been put to much better use in this economy.

    Clearly something else is at play.

    Perception is reality. The perception is that the current Republican Party is made up of extreme right-wing, my-way-or-the-highway, tea-party evangelicals that don’t like people of color, gays, or anyone else that “threatens” their way of life. And somewhere along the way they managed to scare off women because of their views on abortion.

    PS – I just saw and ad for Ken Cuccinelli for Governor……Good luck with that one.

  8. re: perception – it’s not a perception. The GOP is at it’s core a bunch of angry white guys who don’t have much use for minorities whether they be Latinos or Blacks or Gays.

    DJ thinks this is not about Romney and time to move on.

    I agree but this IS about the GOP and how they believe that they
    have a “messenging” problem with the Latino, Blacks and others.

    They don’t have a “Messaging” problem with blacks, Latino’s and others.

    They play dog-whistle politics and they think they can “talk” to the black community about issues.

    these guys are knuckle-dragging neanderthals that deserve to go to Dinosaur heaven.

  9. constructionandlaborguy

    “My hunch is that the most successful states will couple a Red State governance model (limited government) with a Blue State cultural model (greater sensitivity to diversity, tolerance and the environment).”

    I love this premise. I was just discussing with a coworker that the party that can own this concept and produce results supporting this concept would crush the extremes of our two party system and everyone would be better off.

    Assuming we are stuck with a two party system, which party is more likely to morph into this? Pure demography suggests if the GOP wants to win significant future elections, they need to embrace this model.

    Which states already have this approach? Is this fantasy given our system?

  10. re: “my hunch”.. I missed that…

    the GOP has zero interest in this. How are you going to get a “red state” governance when the GOP insists on being neanderthal knuckle-draggers?

    Blue Dog Democrats or GOP RINOs have a far better chance of succeeding at this that the rabid anti-minority GOP idiots.

    you lie in bed with dogs and you get fleas. The GOP plays fast and lose with dog whistle politics then acts like they have a “messaging” problem with minorities. What a bunch of half wits they are.

  11. Jim – I respectfully disagree with almost all your assessments of Obama and the Democratic party. I am very encouraged by the election and the possibility that our federal government will actually address the real problems that you identify with the debt, entitlements, and the tax code – there is a possibility of the grand bargain that fell apart (with much histrionics) in the debt ceiling negotiations of the summer of 2011. So far as those demoralized 49% , I would expect that all but the most partisan of them would be willing to give Obama a chance. State government is Republican now, and perhaps the Republicans can get their acts together now that they aren’t running for office (except of course for the Cooch).

  12. The GOP are the guys that broke the budget by cutting taxes and fighting two wars, doubling the DOD budget and Medicare Part D
    but when we went into deficit, they had no response – as Reagan did when his supply-side went into deficit and he backtracked on taxes.

    The budget we have right now – the one that is one trillion in deficit is the one the GOP created and continues as CR (continuing resolutions) – remember – no budget in 1000 days?

    The GOP simply denies the realities these days. They believe in a Reagan who did not really exist and they have abandoned their socially moderate RINO positions as well as their conservative roots.

    Ronald Reagan himself would be run out of the party. And Ronald Reagan would not stand around with his fingers up his nose when the budget went into deficit. He would have done something – like he did when his supply-side went into deficit – bring the taxes back a bit to get to balance.

    but the biggest lie is that Obama is a “socialist” because he’s actually more like Reagan and other moderate GOP (not banned) than any “socialist” .

    The GOP demanded the sequester as a condition of agreeing to extending the debt – and Obama accepted it and now who is running away from cutting spending to get to a balanced budget – the GOP!

    but Richard – they are NOT going to give him a chance guy – my bet is that they will continue their obstruction and obstinance.

    What would Ronald Reagan have done right now with the deficit?

    would it be more like today’s GOP or Obama?

  13. Hear, hear, Jim! Couldn’t agree more. I posted this to my Facebook page – keep on pushing this message.

  14. You know it was simple for me. Romney never explained how he was going to cut taxes, increase funding to DOD and balance the budget.

    I do “get” the angst with Obama over his big govt orientation and I would have gone for a real fiscal conservative who had a plan but Romney was playing smoke and mirrors from the get go.

    And now, Obama wants to go forward with some kind of a sequester and what does the GOP want? They’re running away from it.

    The GOP used to be fiscal conservatives but they messed up big time under Bush – they had no Plan B if the budget went into deficit.. no cuts to spending …and then the economy went belly up and reduced tax revenues even more and where did that leave them and us?

    Deep in debt and a crappy economy that was incapable of generating enough revenues to balance the budget.

    Did Obama know what to do ? Probably not. Did the GOP know what to do ? Hell no. Their answer was more tax cuts and increases in the DOD budget.

    and what did Romney say? He said he had a “plan” but he could not really “explain” it until after we elected him.

    when did we head towards Boomergeddon? Did it happen all of a sudden in 2009?

    who thinks Romney actually had a plan? Not me.

  15. First, I’d like to see both Parties forced to deal with making real cuts in spending. Not Washington, D.C.-style cuts (i.e., reductions in the growth in spending), but real money taken from budgets. And I support making cuts in the pork-filled defense budget.
    What about ending the tax-exempt status of any foundation that engages in, or funds, advocacy and has paid employees? Get the feds out from funding transportation, except for interstate highways and international airports. Cut the federal gas tax to what is needed for only interstate highways in any state that agrees to raise its gas tax by the amount cut by the feds.
    Let’s put a little pain on the entertainment and sports industries by limiting the deductibility of any amount paid to any one person (directly or indirectly) to $2 M annually. The rest are treated as non-deductible dividends.

  16. TMT and I largely agree. In addition, I’d make Medicare more expensive and aim to have it self-supporting if possible.

    I support younger folks having to pay for health insurance, the same way we have to pay for auto and home insurance..

    We ought to have the strongest, most capable military in the world but spending more than the next 10 countries is obscene.

    we have to recognize that when we talk about entitlements and unfunded liabilities – it should INCLUDE DOD – as we are not at
    the point where DOD will shortly have more retired than active duty and this will only get worse.

    DJ and others here rail about the boomergeddon aspect of social security and Medicare but they totally ignore the very same problem on the military side.

    We should limit mortgage deductibility to one house only, the primary residence and cap it at median home prices. If you want more house or multiple houses, fine – but no taxpayer subsidies.

    We should seriously consider taxing health care benefits and let people take the money as compensation and find their own insurance – and get the employers out of it. let everyone be in
    the same boat and I guarantee you we’ll have a lot more people interested in figuring out how to do health care “right” with free market principles.

    Subsidized flood insurance should go away.

    the feds should fund only interstate highways and cities and towns figure out how they want to pay for transit (or not).

    Student loans should be capped at a set amount like home mortgages and if you want to attend a more expensive university – then you figure out how to pay for it – no subsidies.

    I can go on – but the point here is that we CAN balance the budget but ALL of us have to get out of this “entitlement” mentality – and I DO INCLUDE all the above as included in what we typically call “entitlements”.

    If we actually included these tax writeoffs as ALSO entitlements, virtually everyone in the country would be getting one kind or another “special” entitlement.

    Time to stop blaming the poor and accept our own responsibilities.

    Used to be – you could expect the GOP to step up on these issues.

    now.. all they do is blather about Obama not cutting… but let him dare to identify cuts that affect the GOP’s constituency and you’d think their pink little throats had been slashed.

    Oh.. and while we are at it. Local taxes for schools – are for core academic curricula ONLY. If you want more… you pay for it – no more subsidies for Art, sports, photo journalism and other amenities. 10K per kid is outrageous – no other country in OCED pays that much and yet they all top us in achievement BECAUSE they focus almost entirely on core academics and not “fluff” amenities.

    We teach our kids that they live in a society that pampers them and provides them with just about everything they want – and you know what that leads to ? It leads to adults who think the same way.

  17. As retiring President Eisenhower warned the nation, “We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex.” If he were leaving office today, he would warn against the education industrial complex, the transportation industrial complex, the social services industrial complex, and a whole lot more government private sector complexes.

  18. in terms of money though – the Dept of Ed and Transportation are gnats on a dogs butt compared to DOD , Homeland Security, the VA, and military pensions and health care.

    If you look at all the money that goes to National Defense – it’s about 1.3 trillion dollars or pretty much the entire amount of revenues from taxes.

    the Transportation trust fund takes in 30 billion in gas taxes and spends about 60 billion so you have 30 billion from general revenues.

    The Education is also about 60 billion and a large amount of that goes to at-risk kids “chapter” teachers.

    the DOD budget is 15 times bigger than either of these.

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