Friday, October 6, 2017

Small States, Political Power, and Economic Recovery

A recent story on NPR's "All Things Considered" prompted me to conclude my long-neglected series on small states' outsized political power. I'll let NPR set the stage: 
It's more than a three-hour drive now to the nearest airport. But Mayhew doesn't miss the traffic in cities and the crime, she says. People here don't lock their doors, and everyone knows everyone else.

Now, what's going on in Valentine - while it's way too early to call it a trend - does get at this broader cultural thing I'm noticing in parts of rural America. Young people who grew up in small towns and have been seeing them struggle feel this sort of calling to move home. Even Valentine's own mayor, 35-year-old Kyle Arganbright, moved back a few years ago.
The report describes a nascent hip(ster?) culture in Valentine, Nebraska (population 2,800) built on craft brewing, outdoor recreation, and a halt–however slight–in the reversal of the country's century-long trend toward urbanism. Time may weather this snapshot, but if fluke becomes fad this trend has potential to reshape American politics.

Consider the U.S. Senate, where Republicans currently command a 52-48 majority. In 2016, GOP Senators Crapo (ID), Hoeven (ND), and Thune (SD) were reelected by an average of 48 points. But the total margin of votes for these three seats was just over 630,000. Presidential candidate Hillary Clinton won the districts of Brooklyn, Manhattan, and San Francisco by some 1.3 million votes; if just half of those pro-Clinton urbanites had followed beer and backpacking to Boise, Grand Forks, and Rapid City, the Democrats would control the Senate.
2016 Presidential Election results by county with
result (darkness of red/blue) and population (height of column).
Another way to visualize this is the map above; places that are "deep blue" are much, much more populous than those that are "deep red." Urban Democrats frustrated by persistent under-representation in Congress could vote with their feet, and the effects would be decisive. Not only would such a partisan exodus be effective, it might be the only way to reverse the growing counter-majoritarian trend.

Over 50 years ago, the Supreme Court opined, "Legislators represent people, not trees or acres." (This likely disappoints friend-of-the-blog Brian Dahle, who advocates regional representation in California's state senate.) The people-not-trees view may be a natural dictionary reading, and it may reflect superior policy judgment, and for half a century it has been the law of the land in most cases. But a key piece of the federal policymaking machinerythe Senatebelies this majoritarian notion. Indeed, the Senate defies "one person, one vote" by design.

My purpose in this analysis is not to urge left-leaning urbanites to descend upon rural places and overwhelm their politics. (Although, if they do, they should coordinate so they can permanently disenfranchise their captive states by amending the machinery of the Senate, something that can only be done with affected states' consent.) Instead, I project that the country will become only more urban and the strength of rural America will be even greater. My hope is that rural America's needs are not subordinated to its outlook.

This blog is a living catalog of the perils of rural life. Domestic abuse, gun violence, opioid addiction: forces of death and injury that cry out for a little more regulation, a little more Big Brother in rural lives. As at the outset of this series, I am reluctant to fling myself any further into the thorny debates over these and other issues, but nonetheless it seems that a shortage of government resources and oversightnot an excessdrives many of the social and quality-of-life problems affecting rural America 

As I have alluded to throughout, the economic case is stronger still. While environmental regulations to save the spotted owl and prevent mercury inhalation dealt immediate blows to the timber and coal industries, these sectors were likely doomed in the long run due to trade liberalization and alternative materials. Even if the days of extraction are bygone, rural communities can still exploit nature in 2017 and beyond. Like the eco-tourism that has stabilized vulnerable ecosystems in the global south, many rural places have re-engineered their economies for tourism, recreation, and hospitality. The healthcare industry also sits at the intersection of private-sector growth and economy-shaping policy. As the "Silver Tsunami" crests, healthcare continues to lead job growth. By corollary, reversing the intrusions the Affordable Care Act made into the healthcare system threatens to wrack rural hospitals with job losses and reduced access to care.

While public-sector jobs are anathema to a small-government outlook, the reality is that the federal civil service employs over 1.3 million people. The U.S. Department of Homeland Security (DHS) experienced significant growth in the post-9/11 period, including new service centers for processing immigration benefits. As DHS moved toward more centralized processing of applications, it could have opened more offices in rural places and created stable jobs with upward opportunities. Surely the Vermont Service Center, located in St. Albans (population 6,000) was not sited for its proximity to a critical mass of noncitizens.  The agency could even re-locate its massive California and Texas service centers to rural places with hollowed-out economies. The Internal Revenue Service could adopt a similar model, as could numerous other parts of the federal bureaucracy that review compliance documents, process surveillance data, and perform other tasks that are just as valuable when performed "remotely."
Critics of government employment might point to the map above: already twelve percent of USDA "nonmetro" counties are designated "federal/state government dependent." Siting government agencies in rural communities will only increase this dependence. But this is only problematic as a normative matter if government work is somehow less valuable than comparable private-sector work. Still, such critics might embrace less direct government support such as incentives to entice private companies to place call centers, data farms, and other investments in rural places. (Those who would reject both efforts might explain what government should do for rural communities. The riposte that government needs to "stay out of the way" are hard to reconcile with the narrative of "forgotten" rural communities.)

The leftist candidate in France's recent presidential election argued that workers should have a kind of "first option" to take over closing factories and run them as cooperatives. This is no Soviet daydream: amidst Argentina's fiscal convulsions in the early 2000s, workers seized facilities that they continue to operate today. The history of the Grange Movement reminds us that rural communities were not always sympathetic to free-market ideology.

If this is all too socialist to bear, consider the alternatives. As California confronts climate change and air pollution, neither laissez-faire nor the market-driven approach of emissions credits have spared the Central Valley from the worst air quality in the country. A greater role for regulation seems necessary to keep these rural areas fertile for people and production alike. Signs of the same dynamic elsewhere include the fights over fracking and oil pipeline construction. 

Kansas has pioneered a number of perverse forms of government intervention in the economy. One was its recent and disastrous test of the Laffer curve hypothesis:  cutting taxes at the top super-charges growth and boosts total revenue.  But for its repeated empirical failures, this approach would hold promise as a way to improve rural fortunes. Another Kansas export is the Sales Tax Anticipated Revenue (STAR) bond, which allows private companies to pocket their sales tax receipts over a period of years to service their own construction debt.  This and other species of corporate welfarelike the legal protections and $3 billion Wisconsin has pledged to electronics maker Foxconn to build a mega-factoryare doubly damaging. First, they violate the free-market notions that we ascribe to rural denizens. Second, and more importantly, they embrace a "race to the bottom" where small states often give away more than they gain while shouldering the risk of shiny new investment "baubles." 

As a final act of mercy, I will summarize the argument that I have unpacked over so many posts and months. The U.S. Senate inflates the political might of small states more than the Framers likely intended. (Other aspects of federal politics amplify this.) This tends to strengthen advocates of reducing the reach of government into the economy. Despite these quirks, the Senate is unlikely to change. Thus, rural voices are pronounced in national policymaking and are likely to grow louder over time.  This may be a feature rather than a bug: one aim of this blog is to highlight the urban-normativity of modern life.  Yet the marriage of rurality and anti-government ideology is unlikely to yield domestic bliss.  My observation is no doubt a cliché:  the urbanite certain that he knows what is best for rural folks. But my thoughts are not un-examined or uncritical.  For rural America, Uncle Sam's hand may offer more help than the invisible one.

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