The Blue state model

Political Scientists Jacob Hacker and Paul Pierson had a nice piece in the Times last week on how the path to prosperity is that taken by blue states.  Here’s the key chart:


Really, you want to live in a blue state.  And some analysis:

This red-blue divergence is all the more striking because red states still receive much more in federal spending relative to the federal taxes their residents pay. In other words, blue states are generally outperforming red states even while heavily subsidizing them.

Why are red states no longer consistently gaining ground? An important reason is that modern knowledge economies increase the rewards for education, research and development and urban hubs that promote the exchange of ideas and development of talent. This has made local conditions more important even in this age of globalization. And the places where these effects have been most successfully promoted are overwhelmingly blue.

Yes, there are fast-growing red state economies. But many, like North Dakota, look more like Saudi Arabia than Silicon Valley. Not all states are sitting on huge fossil fuel reserves, and tapping these reserves isn’t costless. It creates pollution and other problems — negative externalities — that go beyond states’ borders, notably the costs associated with carbon emissions.

By contrast, the innovation-driven growth in blue states creates broadpositive externalities. People educated in blue states can move to red states; technologies developed in blue states can be emulated in red states. In other words, blue state investments “leak out.” Yet these states are still producing high levels of prosperity…

But we should remember that the key drivers of growth are science, education and innovation, not low taxes, lax regulations or greater exploitation of natural resources.

 And we should be worried, whatever our partisan tilt, that leading conservatives promote an economic model so disconnected from the true sources of prosperity. [emphasis mine]

About Steve Greene
Professor of Political Science at NC State

2 Responses to The Blue state model

  1. ohwilleke says:

    This is a key observation.

  2. rgbact says:

    Ah,those non partisan political scientists. Seriously, how does this stuff not shame academia at some point.,.They don’t even try to eliminate other factors.

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