Big Unions and Big Government — It Works for Michigan, Why Not the South?

On, Michael Lind excoriates Southern states for leading the attempt to “kill” the North’s auto industry by opposing the multibillion-dollar bailout of the Big Three (or should we now call them the Midsized Three?) automakers in Detroit. He accuses Southern states, led by “Neo-Confederate” elites, of engaging in beggar-thy-neighbor economic development policies to advance the interests of their own foreign-owned automobile manufacturing interests.

He finds this “race to the bottom” economic development strategy to be “shocking” and a threat to national prosperity.

Today the division is no longer between slave and free states, or agrarian and industrial states, but between two models of industrial society — the Northern model, based on adequate public service funding and taxation and unionization, and the Southern model, based on low-tax, low-service government and low-wage, non-unionized, easily exploited labor. If the industrial North and the industrial South compete for global capital investment, then the industrial South is likely to prevail, because Northern advantages in the form of a skilled workforce and superior public services are unlikely to overcome the South’s advantages of low wages and low taxes and state and local tax subsidies. The result, sooner or later, will be the Southernization of the North and Midwest, as states in the historic middle-class core of the U.S. are forced by economic pressure to emulate the arrangements of Alabama and Mississippi and Texas.

The alternative to the Southernization of the U.S. is the Americanization of the South — a process that was not completed by Reconstruction and the New Deal and the Civil Rights era, which can be thought of as the Second Reconstruction. The non-Southern states, through their representatives in Congress and the executive branch, and with the help of enlightened Southerners, need to use the power of the federal government to put a stop to the Southern conservative race-to-the-bottom strategy once and for all.

Lind brushes up against the truth in one regard, although he really doesn’t understand the meaning of it: Southern states do subsidize economic development projects, and such beggar-thy-neighbor competition is indeed harmful, insofar as it undermines the state/local tax base. To a large degree, the states of the old Confederacy concentrate resources on corporate and industrial recruitment, an outmoded economic development model. But the solution isn’t unionism and government. The path to prosperity and higher living standards in a globally competitive economy is through productivity and innovation, achieved through the development, recruitment and retention of human capital (Economy 4.0 in Bacon’s Rebellion parlance).

Lind’s prescription of achieving industrial prosperity led by unionism and government is tragically wrong-headed. The states that have tried it, like Michigan, are sliding down the economic drain pipe.

Lind is obtuse on so many levels that it is hard to know where to begin. Let me try.

First, he seems oblivious to the fact that opposing multibillion-dollar subsidies with no accountability is not a long-term solution to the woes of the Northern automobile industry; subsidies are no more than a license to pick the pockets of taxpayers nationally and will accomplish nothing more than delay the painful but necessary restructuring of a failing industry. Furthermore, Lind evinces no awareness that Southern employees of automobile manufacturers might legitimately resent subsidizing unionized competitors that countenance unproductive work practices and support health care benefits for workers and retirees that are not only more generous than those of Southern auto workers but more generous that those of just about anyone in the country — excluding, possibly, federal employees and members of Congress.

Secondly, Lind makes appalling generalizations about the political economy of economic development in the South. The industrial recruitment approach to economic development doesn’t emanation from “conservatives” or “neo-Confederates.” It reflects the conviction of both Democrats and Republicans and politicians of all races that the creation of jobs and expansion of the tax base is a worthy object of public investment. That philosophy has its flaws, as I have enumerated on this blog. But it has nothing to do with “conservatism,” nor even the South — just look at the tax breaks handed out by New York City in years past to prevent the flight of its leading corporations.

Thirdly, Lind ignores the extent to which many Southern metropolises have pushed beyond the industrial-recruitment economic development paradigm by focusing on entrepreneurial growth. Northern Virginia, Austin, Atlanta, Charlotte and the Research Triangle are the best examples. Sadly, not a single one of the unionized/big government cities of the Midwest have reinvented themselves to the same degree.

Fourthly, as for the “race to the bottom,” decaying Midwestern and Northeastern states are far better illustrations of that phenomenon than even Mississippi or Alabama. Although progress is measured in incremental gains over decades, Southern states are slowly but surely closing the wage gap between themselves and the rest of the country. The states that have adopted Lind’s paradigm have squandered their lead despite enormous advantages, including a better educated populace, the presence of corporate headquarters and major industry clusters, world-class universities and massively endowed not-for-profit institutions that underwrite community initiatives.

Lind seems totally unaware that he is defending a failed governance model: the idea that taxes don’t matter, that corruption doesn’t matter, that productivity-stifling work rules don’t matter, that higher levels of state/local public spending miraculously inure to the benefit of the general good and not to the benefit of politically powerful constituencies. He would use the coercive power of the federal government to impose an antiquated and ruinous philosophy upon the entire nation. I don’t think he will find too many “enlightened southerners” willing to go along.

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12 responses to “Big Unions and Big Government — It Works for Michigan, Why Not the South?”

  1. Here’s a question.

    If there was no American Auto industry in the North, would the European and Asian transplants still want to stay in the US if they could build cheaper overseas and import?

    Also.. how about the idea of GM and Fords made in Mexico and Central American and imported into the US?

    Methinks.. we’re are, once gain, looking at the US as if it were not part of a bigger world economy.

    If the South can outbid the North in the race to the bottom in labor wages…why can’t Southern Mexico trump the Southern US?

  2. Anonymous Avatar


    While I agree with a number of your points, one shows you don’t know what you are talkingt about.

    “Sadly, not a single one of the unionized/big government cities of the Midwest have reinvented themselves to the same degree.”

    Baloney. I have lived and worked in the MidWest twice — two years in Chicago and three in Cleveland. Here’s a list of Midwestern cities that HAVE become progressive economic models:

    Columbus, Ohio,
    Indianapolis, Ind.
    Champaign-Urbanna, Illinois
    Omaha, Ne.
    Kansas City, Mo/Kan.
    Parts of Chicago
    Suburban Cincinnati

    I am sure I am missing a few. I love the South and intend on living here. But the MidWest of far more progressive in public education (K through college) and outlook. In general, the library systems are better than what you find in Virginia, cultural amenities (i.e. museums and orchstras) are better, etc.

    The fact that you seem to stall on the rustbelt parts of Ohio, Michigan and Illinois shows you really haven’t traveled much in the region and don’t know much about it other than what you may have read..

    Peter Galuszka

  3. Anonymous Avatar

    Peter makes a good point:

    Generalizations about larges parts of the US of A are of little value.

    They feed what Dr. Risse calls Geographic Illiteracy.

    Many USRs have very progressive Beta Communities and SubRegions as he would point out.

  4. Methinks thy unrepentant liberalism has taken you away on a flight of pure fancy:

    “But the MidWest of far more progressive in public education (K through college) and outlook.”.

    Let’s see – I call for a comparison of any Northern Virginia public school system against any public school system from the cities you listed. Any one. I lived in Chicago too. The public schools suck. As for public universities – again pick your fight. Ohio? Really? Kansas? Are you kidding?

    Most of the North is mismanaged crapola. They are supposedly very clever liberals but where are the black governors? Try catching a cab in NYC if you are black. Look at the segregation in Cleveland. And that’s the mid-West, which is vastly ahead of the North East. when were those school busing race riots in Boston? 1979? 1979!?!

  5. can we call a spade a spade?

    The attempt to kill the auto bailout had nothing to do with cars, and everything to do with politics.

    Namely it was the start of a big war by what is left of the Republican party to make a fight about unions. Democrats want to impose unions through card-check next year.

    Given that 1) the Republican party is now a southern party and 2) any midwestern Republican worth his salt needed to go with a bailout, I can see why it looks like a regional fight.

    But this is pure politics. Regional-bashing isn’t helpful, and regional generalizations even less so.

    Not to invoke EMR as a scare tactic, I **think** he would argue that Euro and/or Japanese settlement patters are more “sustainable”. Given that these are extremely UNION friendly areas, I suspect that UNIONS have very little to do with sustainability.

    Rather than union bashing, I would prefer to find some information on why Obama is turning into an exurban president. Zero sense from him that he understands land use. He cares of environmental regulation, which may be good, and investing in cities, but his projected infrastructure program could be the biggest disaster to land-use in 50 years.

  6. there are a lot of different ways to compare schools.

    Here’s one.

    NAEP 2007 8th grade reading:

    Vermont 273
    Massachusetts 273
    Montana 271
    Maine 270
    New Jersey 270
    New Hampshire 270
    South Dakota 270
    Minnesota 268
    Pennsylvania 268
    North Dakota 268
    Ohio 268
    Kansas 267
    Iowa 267
    Virginia 267
    Connecticut 267
    Nebraska 267
    Wyoming 266
    Oregon 266
    Colorado 266
    Delaware 265
    Idaho 265
    Washington 265
    Maryland 265
    Wisconsin 264
    New York 264
    Indiana 264
    Illinois 263
    Missouri 263
    Kentucky 262
    Utah 262
    Texas 261
    Michigan 260
    Florida 260
    Oklahoma 260
    Georgia 259
    Tennessee 259
    Alaska 259
    North Carolina 259
    Arkansas 258
    Rhode Island 258
    South Carolina 257
    West Virginia 255
    Arizona 255
    Louisiana 253
    Alabama 252
    Nevada 252
    New Mexico 251
    California 251
    Hawaii 251
    Mississippi 250

    you might notice that most of the Southern States scores are not exemplary.

    So.. obviously the automotive transplant companies that have located in the south are not apparently not in need of a highly educated workforce.

    Of course.. I’m sure that manufacturing automobiles requires some minimum literacy level but with the advent of robots … there is an open question of whether or not the literacy level of US workers in general is any particular advance over the literacy levels of workers in other “low tax” countries.

    In other words.. can non US “low tax” countries build cars even cheaper than “low tax” American States in the south?

  7. Anonymous Avatar

    It is unfair to compare Northern Virginia — one of the highest per capita income areas in the U.S. thanks to high-paying federal jobs — to other places.
    On a more subjective note. My kids went to public school in suburban Cleveland and they were every bit as good, if not better, than the schools in suburban Richmond. Schools in the city of CLeveland are a mess — but guess what, so are schools in the city of Richmond.


  8. I think Charlie has it right.

    The Pachyderms are trying desperately to hold on to their Reagan blue-collar southern white men constituency rather than adapt and embrace wider and more diverse demographics and constituencies – which would (should) include ALL blue collar workers including those unionized and the middle class – the largest demographic.

    The GOP apparently so hates the unions ideologically that in pursuit of killing them, they are willing to lose the middle class entirely

    It's almost if they really don't want to govern as much as promote their hard core values.

    To a certain extent, what is going on in Virginia with the GOP is emblematic of their struggles nationwide IMHO.

    Here we have one of the most serious crises affecting the middle class in recent history and what is the GOP doing? They've got their clubs and torches out running down those hated unions… and to heck with everything else…

    Never fear though… the Dems will probably tax & spend their way out of the hearts and minds of the folks who supported them.

  9. Larry:

    Peter wasn’t listing states – he was listing select areas. States are too big to consider.


    You were pretty selective with your list – suburban Cincinatti (I wonder if you count Kentucky suburbs in that), Omaha. I believe that more people live in Northern Virginia than any of the places you selected (perhaps “parts of Chicago”). And, as I’ve written before, there are more people living below the federal poverty line in Fairfax County than there are people living in 80 Virginia counties. Those poor people benefit from Fairfax’s schools too. Finally, I believe that Washington, DC spends more per pupil on public education than any other major school district in the US. So, Northern Virginia may be wealthier than the city of washington but we are spending less and accomplishing much more. As for Richmond’s public schools? I have no idea. I’ll take you word for it. But Henrico County has the same per capita income as Prince William County (and a lower cost of living). So, do Henrico public schools trail Prince William public schools? If so – why?

  10. I'm not sure what the point is with regard to the claim that NoVa has better schools than other areas other than Groveton's clear loyalty to his own area but I think he misses an important aspect of one of the roles of State government.

    I think State statistics DO COUNT and the reason why is that one of the fundamental reasons why a State is justified in taxing all of it's citizens and then allocating funding statewide such that every child is afforded the opportunity for a quality education.

    Public Education is what gave America it's middle class and to me, public education is what defines a true egalitarian society.

    and to help make that point, here are the top schools in Va according to the latest US New & World Report:

    and pay attention to the column that says "Disadvantaged Student Enrollment % ).

    I would agree that a major failure is many of our urban schools but the problems are not the result of unionized teachers as much as it is the horrible demographics of the students who are brought into a world of poverty, unemployment and crime and who really have no choice but to try to survive in that environment.

    and if you want to talk about regions and educational literacy .. the South – the bastion of non-unionized, right-to-work nirvana does not excel in education literacy in it's urban areas either.

    So.. if we want to compare apples… let's compare apples… and compare ALL urban schools in both unionized and non-unionized cities and I'm betting you cannot tell the difference.

  11. James Atticus Bowden Avatar
    James Atticus Bowden

    PG: If we ever get to chat I wannna hear about this quote of yours “I love the South”, if it means more than the weather.

  12. Larry:

    You and I will probably never agree on the importance of states as an analytical aggregation. I think states are an outdates and basically worthless organizational level. One of EMR’s strongest points is his governance structure.

    As for schools, you really can’t measure much on a state by state basis. I followed your URL. Virginia has 4 of the country’s best public high schools (gold rated). All four are in Fairfax County. So, what does that tell you about union vs. non-union or South vs. North? Well, it tells you nothing.

    Prince William County has no top ranked high schools. Henrico County (with a very similar per capita income) has two silver award winners. What does that tell you? Nothing that I can see.

    Illinois has almost twice Virginia’s population but only half as many gold medal high schools. I guess Virginia has a better educational system – but only if you live in Fairfax County. Virginia has 45 top high schools to Illinois’ 71. So, I guess Virginia wins again.

    Virginia has 18 high schools rated either gold or silver. 12 are in Fairfax County.

    So, when you ask how good are Virginia’s schools I’d say it depends on where you live. Maryland has 3 gold rated schools. They are all in Montgomery County. So, I guess it matters where you live in Maryland too. Prince George’s County, MD (a Washington, DC suburb) has no medal winners. Arlington County, VA (a Washington, DC suburb) has no medal winners. Prince William County (a Washington, DC suburb) has no medal winners.

    Educational excellence in this neck of the woods isn’t about NoVA or even the DC suburbs. It’s about 2 counties which run really good school systems. Now, that’s probably worth studying.

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