Blue Regions: Economic Engines of Economy
Michael Lind has made the bizarre argument that Blue Cities are "parasitic on suburban Red America."
At the most basic level of taxes paid and spending received, the Red States are the welfare states, as this Tax Foundation report makes clear. Blue states like New York, California, New Jersey, Michigan and Massachusetts pay far more in federal taxes than they receive in federal spending. Conversely, Red States like Alabama, Idaho, Virginia, Mississippi and South Dakota receive far more in federal spending than they pay in taxes.
And at the Congressional District level, it's richer GOP districts that receive more federal spending per person than Dem districts, especially since the GOP took control of Congress in 1994. See graph:

This is from a few years ago and the Red State subsidies have only grown as DeLay has cemented his control.
And when you talk about the basic economic engines of any region, the exurbs may have significant job growth, but most cities still have far more jobs than residents. It's the suburbs that depend on the cities for their incomes-- not the other way around.
While I may not agree with every detail of his analysis, Richard Florida has made the bold argument that it is precisely "blue state values" -- being pro-gay and culturally liberal -- that has driven the strongest regional growth in our country.
And areas with strong unions continue to have the highest wages and over history have maintained that advantage, including for low-income workers. As Oren M. Levin-Waldman argued in this report:
[W]hen educational factors are controlled for, workers in [non-union] states still have a greater probability of earning around the minimum wage than workers in high-union-density states, and this pattern remains consistent throughout the period...Although low educational attainment is likely to be the most important determinant of who earns around the minimum wage, workers with little education in [non-union] states are at least two to three times more likely to earn around the minimum wage than those with little education in high-union-density states.If anything, Blue state areas are often victims of their own success, as high density makes new growth harder and more expensive.
But for those who look at the growth in Red States, don't ignore the massive federal spending driving that growth in what Ann Markusen, Peter Hall, Scott Campbell and Sabina Deitrick have called The Rise of the GunBelt. As they extensively documented in their book, the whole history of the "Sun Belt" has been of tax-subsidized growth-- subsidized water for agribusiness, defense contracts, highway spending -- all of which transferred wealth from the old industrial areas to the exurbs.
It has been those hard-working unionized Blue Staters that have paid for that suburban Sunbelt growth. So let's be clear about who the parasites have been over the last half century.












Indeed, Lind's postulation has many Rovian qualities; It is so counterintuitive that you are forced, if you take it seriously, to expand the boundaries of reality to include the statement, thereby giving ground, and it attacks the strength. The outrageousness of it also puts you back on your heels as you consider how to begin to respond, fearing "You have it exactly backwards" might be a little too shrill.
For the record, I am only referring to th specific parasitic claim, and think the rest of Lind's commentary is important to consider. I do not want to imply that I think Lind is like Rove in motivation, just that this attack has a structure that is similar to the current Republican anti-reality campaign.
August 12, 2005 9:22 AM | Reply | Permalink
The howls of rage from those RedState districts will shake the rafters when the budget cuts necessitated by Dubya's fallacious "tax cut" policies finally start biting into the Federal largesse. Anyone who bothered for the last four years could see that the RedState electorate had become the new welfare queens of Reagan rumor. The Democrats should remember this and not just trim allocations to those districts when they retake the Congress in 2006 but should exact revenge. Republican scum respect only power and the time has arrived for such power and accountability to be meted out to them.
August 12, 2005 9:28 AM | Reply | Permalink
How do the figures look if you compare core urban areas (inside the city limits) with the city's surrounding suburban doughnut (generally referred to as the metropolitan area just outside the city limits)? That seems to be what Lind was using as a basis for his theories. Comparing blue states to red states does not really address what Lind was talking about, does it?
August 12, 2005 9:28 AM | Reply | Permalink
August 12, 2005 9:45 AM | Reply | Permalink
I assume that Lind is trying to be provocative with his counter-counter-conventional wisdom (CV = red states are good, cf Brooks, D; counter-CV = red states are welfare queens, cf economic statistics; counter-counter-CV = ?).
But any real point he has to make is being lost in a too-cute-by-half argument, based on ridiculous (and very Brooksian) caricatures supported by little more than personal opinions.
Maybe he's trying to make some inner-city vs exurbs contrast, but where's the red state vs blue state component in that? And more to the point, where are the facts to back up his "analysis"? Or is this all some half-assed idea that came to him over his latte this morning?
Unless Lind is offering us the kind of deliberate provocation that has given the DLC a bad name in the rest of the Democratic party.
In any case, the final image I have is of another agent provocateur wannabe flaming out while trying to hold up an increasingly flimsy and ridiculous argument.
And let's get something straight: the "exurbs" are the land of SUVs and McMansions, complacent self-satisfaction with tax cuts and continued govt services and deficits be damned. They represent everything that is wrong with this country, and they ain't switching from the Republicans until the pied piper finally comes to be paid....
August 12, 2005 9:46 AM | Reply | Permalink
It certainly doesn't take an economic genius to see that cities either have to 1) have people living in them, or 2) have people working in them. Otherwise, there wouldn't BE any cities. Lind's bizarre claim that somehow cities are parasitic entities where people neither live nor work doesn't deserve much more attention than that. But I'm gratified to see that Blue states are the breadwinners.
August 12, 2005 9:48 AM | Reply | Permalink
Good point. However, that discussion has been going on since the 1970s with no clear resolution. There are some cities (Cleveland, St. Louis, maybe Detroit come to mind) [1] where the 1880s urban core is clearly gone and all the activity is in the suburbs. But there are others (NYC of course, Chicago, Boston, Seattle) where that is clearly not true. The exurbanites will tell you they have built everything from scratch with no help from the city, but since I used to drive around those cornfields when there was no-one there to pay for building anything I have to disagree ;-)
Then you get into the issue of the doughnut suburbs. 20 years ago they too felt that the city was obsolete and should be abandoned. Now that the exurbs are abandoning them, they have opened lines of communications with the central city back up. Where do they fall into the mix?
I don't have any answers, but with that much controversy over that long a period I think the answers are not as clearcut as the anti-city advocates would have you believe.
sPh
[1] Interestingly, in both Detroit and St. Louis the amount of economic activity in the downtown is still substantial (perhaps equal to that of the largest rival power suburb), but it is depricated by state and national politics.
August 12, 2005 9:56 AM | Reply | Permalink
Great post. It's refreshing to see citations and evidence offered, instead of simple conjecture.
August 12, 2005 10:03 AM | Reply | Permalink
And just how would you propose to seperate the surrounding "doughnut" as you call it? If many of them commute inoth the city to work, use the infrastructure, dine and seek entertainmnet, etc. how in fact are they really seperate from the city at all? And what would be your purpose in trying to seperate them out?
Other than to just dodge taxes of course and try to avoid putting anything back into the central community. Not that burbs have ever attempted that of course. Certainly not affluent republican burbs for example.
Got any other interesting questions Dan?
August 12, 2005 10:06 AM | Reply | Permalink
Sorry to everyone for injecting a more or less personal reply to Nick, who seems to think I am a troll (or so he said yesterday) ...
Nick, despite your obvious antagonism to anything I write (thanks for not resorting to your usually childish troll charges today, that's a step in the right direction), I do have more questions. However, in reference to the first question which you dismissed so cavalierly, it has real relevance to where I live here in Atlanta, which has a strongly Democratic, mainly African-American, gentrified-white demographic and a surrounding Republican doughnut. For as long as I can remember, there has been tension between the higher-income suburbs and the poorer inner city, and that has been reflected in the politics. To the extent that the Atlanta inner city-doughnut situation is applicable nationally, I don't know, but it seemed a relevant point to add to the red state-blue state mix.
August 12, 2005 10:17 AM | Reply | Permalink
Nick,
Perhaps a little less snarky would be more effective? The question I would pose to Dan is, it appears from the perspective of many city dwellers that the middle-middle class suburbs and above have involuntarily outsourced their handling of the very poor and mentally ill to central cities - often by literally busing them downtown and dropping them off. There are a host of other issues (illegal drug supermarkets, for example) where the classical link between the consumer of the service and the bearer of the cost has become unlinked. Do you agree? If so, is this sustainable?
sPh
August 12, 2005 10:19 AM | Reply | Permalink
Nice post. You point out:
"While I may not agree with every detail of his analysis, Richard Florida has made the bold argument that it is precisely "blue state values" -- being pro-gay and culturally liberal -- that has driven the strongest regional growth in our country."
I would just like to say that I think "blue state values" is a much broader concept--sort of like privacy rights--and is more like being open to new ideas, tolerant of opposing beliefs, scientifically inquisitive, etc. things like that. It is these higher ideals which drive the growth--being pro-gay and culturally liberal are additional ideas which fall under the umbrella of an open and inquisitive "society" or region.
August 12, 2005 10:23 AM | Reply | Permalink
The principal source for Federal funds data is the Consolidated Federal Funds Reports data from the Census Bureau. ERS aggregates the latest available data (fiscal year 2001) to the county, State, regional, and national levels for each program and computes per capita estimates by type of nonmetropolitan (nonmetro) county. Overall, nonmetro areas received slightly less funding per capita ($6,020) than metropolitan (metro) areas ($6,131), but the amount of funding varied greatly by type or function of the program. Nonmetro areas benefited disproportionately from agriculture and natural resource program payments, income security payments (including Social Security and food stamps/other assistance to low-income individuals), and human resources programs. In contrast, metro areas benefited more from community resources programs (including infrastructure, housing, and business assistance), defense and space programs (the largest of the national programs), and national (nondefense) function programs such as criminal justice and law enforcement, energy, and higher education and research.
So which regions get what in rural America? Total Federal funding was highest in the South ($6,660 per capita) and lowest in the Midwest ($5,566 per capita), but this pattern did not hold up for nonmetro areas. The nonmetro West received the most ($6,129 per capita) due to higher-than-average payments from community resources and national functions as well as relatively high funding from human resources and defense/space functions. On the other hand, the nonmetro Northeast received the lowest funding ($5,512 per capita) as a result of lower-than-average payments for agriculture and natural resource programs.
Well I didn't know that!
August 12, 2005 10:23 AM | Reply | Permalink
20 years ago they too felt that the city was obsolete and should be abandoned. Now that the exurbs are abandoning them, they have opened lines of communications with the central city back up. Where do they fall into the mix?
I've always thought that was total garbage. If someone set up a "non-urban" sprawl community in say the middle of Montana, built their own airport, and drew residents for the way of life, sure maybe one could argue that cities were obsolete.
But the reality is every sub-urban doughnut relies on many services from the nearby city, which is why they’re called sub-urban and located around cities, and why they tend to commute into the city for work. The city offers more diverse employment, entertainment, dining, museums, hospitals, airports, universities, and a versatility during economic realignments that acts as a safety net. How would one like to be unemployed and facing career decisions in the middle of Montana, in some imaginary community with low population density and much economic diversity?
They problem with these suburbanites is they just don't want to pay for anything. That's what all this is really about. A lot of people have just become cheap. It's the mentality that someone else will pick up the tab.
That's why I can't stand all these assorted tax dodgers and whiners. If they're all really so independent, than go move to Montana or someplace and prove it. In the meanwhile, stop trying to have it both ways.
August 12, 2005 10:24 AM | Reply | Permalink
I am a dedicated city guy myself, but I have to respectfully disagree. Certainly in 1980 this was still true. As Gerrad pointed out in Edge Cities, by 1995 that was no longer the case: many suburbanites never travel into the city or use any of its services. In Detroit, for example, the restaurants, shopping, and work is all in the outer ring. And this process continues; Kansas City is grandually spreading into Kansas around the "outer belt", with no reference to the urban core.
sPh
August 12, 2005 10:37 AM | Reply | Permalink
That's why the comparison of Congressional districts is useful. A large number of those are urban areas, compared to the Red County exurban districts. Obviously, some Dem districts are also exurban as well, but proportionately, the Dem districts represent a far higher concentration of those Blue City areas.
August 12, 2005 10:37 AM | Reply | Permalink
I live here in Atlanta, which has a strongly Democratic, mainly African-American, gentrified-white demographic and a surrounding Republican doughnut. For as long as I can remember, there has been tension between the higher-income suburbs and the poorer inner city
The answer to that is real simple. Those white Republicans are tax dodgers, they want to have it both ways; having immediate access to the city on one hand, having a cheap labor pool for menial jobs in the restaurants, janitors, etc. They bellyache whenever they have to pay for schools or civil structure back into the city community.
Which is doubly mean spirited considering a lot of those communities were built on "white flight" government housing subsidy which was incredibly biased and racist.
As historical record of government policy shows, post WWII, institutional racist policies destroyed middle class black communities. Since blacks moving into a neighborhood were considered to lower the value of surrounding properties, banks making home loans to build entire communities would exclude blacks. That policy also had the opposite effect on black city home owners, who correspondingly saw their property values plummet due to “white flight” ruining many black families who were previously middle class, able to afford education and moving up the ladder. Hence institutionalized racism, white suburbs trying to dodge any taxes for the city while exploiting it by living in close proximity, and poor city communities where minorities are unable to get ahead, trapped.
I'm not going to answer these questions any more from Dan so long as he has an endless string of "just not getting it" responses. I don’t claim to be a mind reader or know intentions. But his comments continually have a rt wing slant to them, and continually interject Rt Wing assumptions, untruths, which many consider inflammatory. That prompts the rehash of arguments obvious to most people, and which many find irritating as Dan’s ratings show. Regardless of intentions, that is the functional definition of a troll.
Dan might want to try reading quietly, or asking questions without interjecting Rt Wing talking points if he’s really interested in information.
August 12, 2005 10:46 AM | Reply | Permalink
Just for the record, this is documented in Crabgrass Frontier (ISBN 0195049837); look for the discussion of "Mortgage Quality Maps", which were distributed by the US Federal Government.
sPh
August 12, 2005 10:49 AM | Reply | Permalink
You wrote ... "Dan might want to try reading quietly, or asking questions without interjecting Rt Wing talking points if he’s really interested in information."
Perhaps you can do us all a favor, Nick, and outline where you are on the spectrum, so that we will know what is to the right of you. From your judgements and demands about who should post and what they should post, you seem to have assumed an ownership of this blog that I did not know you had. Josh did not notify me that you are in charge. Please clarify these things for all of us. Thanks.
August 12, 2005 10:58 AM | Reply | Permalink
Detroit... Kansas City
To say that the burbs around Detroit don't benefit from Detroit is ridiculous. I can't believe people have been so mystified with that junk.
Regardless, what kind of exaples are those anyways? Neither Kansas or Detroit and thier surrounding Burbs should be a model for anything. Much of the capital coming into those Detroit burbs for example comes in the form of defense spending. It's not a vibrant region by any stretch of the immagination, nor is it a model for development.
Let's talk about real city/burb relationships with dynamic economic leaders. New York, LA, San Francisco, Boston, Seattle. Those are the places developing high value exportable goods and services, and each relies on the cities as focal points for dynamicism, infrastructure, and recruiting of a labor pool.
This whole ex-urb thing is a totally BS myth. Show me an ex-urb community that is truly seperate from any city economy, and I'll show you a trickle down service sector economy that can;t survive without the dynamic city oriented economies of the places I mentioned above.
August 12, 2005 11:01 AM | Reply | Permalink
I wonder how much longer this divide and conquer strategy can be used before (if that point hasn't already passed) real damage is done to the unity of the nation. Leaving aside the divisive, and in my opinion, incorrect, analysis of government directed intra-national flow of funds, Mr. Lind's focus on those flows is worth noting. The more divisive the rhetoric the less tolerant people will be of such transfer flows which will make government far less efficient than it is now (which is not to sing the praises of government efficiency).
August 12, 2005 11:11 AM | Reply | Permalink
I grew up in the region, and lived and worked there until six years ago. I do not recall any major defense installations or military bases in the area. Rather it was (and still is) the auto industry which dominates. Neverthreless, all the through the 90s metro Detroit was quite vibrant and dynamic, and was making headway in diversifying beyond its auto dependence (economically, not in terms of transportation). These days, yes, it’s all in bad shape; for whatever reason Michigan, along with neighboring Ohio, has experienced not so much as a breath of recovery from the 2000-2001 recession.
August 12, 2005 12:13 PM | Reply | Permalink
While I may not agree with every detail of his analysis, Richard Florida has made the bold argument that it is precisely "blue state values" -- being pro-gay and culturally liberal -- that has driven the strongest regional growth in our country.
Florida's basic thesis (to my reading) is that the lion's share of future economic growth in our country will come from the "creative class" - folks with right-brained creative skills that produce concepts and bright ideas that can't be off-shored. And since a good fraction of these creative people are living non-traditional lifestyles, those parts of the country that are most tolerant and alternative-friendly will attract these folks and, by association, spur local economic growth.
Now, how do you get a community or region to be "creative class-friendly?" Is it through religion (or lack thereof)? Nope. Fact is, many of these creative class magnets are also areas with high church attendence. Also, were some of these homophobic hard right Christians to actually live according to Christian tenets of tolerance, the wouldn't be so gay-bashing.
I think that no small part of creating a creative-class friendly community comes from quality education. The higher the education level of a community, the more tolerant it is likely to be. And as a bonus, a highly-educated workforce no doubt has an ancillary affect on the economic growth driven by the creative talents of those drawn to the community.
August 12, 2005 12:34 PM | Reply | Permalink
The #13 comment by BKL is very helpful in terms of which locations "GET" from which types of Federal programs. However, which locations "PRODUCE" how much for tax revenues to the Federal treasury is not part of the data. Further, which locations make the grandest contributions to the GDP or offer the largest number of jobs or the best jobs or the highest paying jobs or the most useful products? ? ? ? ?
I think the discussion is very much lost in apples & oranges & bananas & grapes types of comparisons. I now live in an area where defense, aerospace, manufacturing, and software generate enormous corporate & personal tax revenues to the Fed. & also gobble up huge program subsidies. I grew up in a totally agrarian area. Pay attention: y'all cain't eat if'n ya' don't get da' chow from mah redneck kin.
August 12, 2005 3:17 PM | Reply | Permalink
I do not recall any major defense installations or military bases in the area.
I said defense spending. You've never heard of General Dynamic Land Defense Systems for example? Come on.
Rather it was (and still is) the auto industry which dominates.
US auto manufacturing by US auto makers is on the decline and has been for a long time. GM was just rated a junk stock.
The point is that Detroit burb's economy is largely driven by 1) an influx of capital due to defense spending from tax dollars. 2) a declining American owned auto industry.
A community like the burbs of detroit is not sustainable. It's no model at all.
These days, yes, it’s all in bad shape; for whatever reason Michigan, along with neighboring Ohio, has experienced not so much as a breath of recovery from the 2000-2001 recession.
It's not for "whatever reason" it's for very specific reasons. It takes universities, a diverse population, a community which draws the best from overseas, and such to be competitive.
The basic problem communities like those have, is they either need to be more like those blue hubs of innovation, or more like the Amish, but they can't have it both ways, being relativly closed, relativly less worldly and urbane, while still having all the gadgets, cars, and such that is generated by the global high tech economy.
August 12, 2005 3:26 PM | Reply | Permalink
Not to mention that Venice and the Hanse pretty much proved Lind wrong about 6 centuries ago. And don't even get me started on Rome, Alexandria and Athens.
Cities have been, and always will be, the engines of innovation and business.
August 12, 2005 6:44 PM | Reply | Permalink
No I haven’t. Trust me, whatever this company is all about, it is not a household name in suburban Detroit, unless it has become one since 1999, when I left the area. Though I doubt it, since I still have family connections, and friends back there, and while people I know still work for Ford, I have never heard of or met anyone working for this company you mention.
Re: US auto manufacturing by US auto makers is on the decline and has been for a long time.
I’m not disagreeing. I have witnessed this long decline during my adolescent and early adult years. The state of Michigan made a strong attempt to end its dependence on the auto industry during the late 80s and 90s and for a while this seemed to be working: all sorts of new economy businesses were booming in the office parks of Oakland and Washtenaw counties. Then it all just sort of died, and has yet to show any signs of resurrection.
Re: A community like the burbs of Detroit is not sustainable.
To be sure the area’s present circumstances are not sustainable. But if it finds the key to recovery? The jury is still out on that one.
Re: It takes universities, a diverse population, a community which draws the best from overseas, and such to be competitive.
??!!?
Have you ever been to the area? Maybe driven about 30 miles west out I-94 to a burg called Ann Arbor? I suggest you do so sometime. You’ll be pleasantly surprised. One of the premier research universities of the country is located there (disclosure: I am a graduate thereof). Detroit city itself is a wreck, agreed. But the larger metropolitan area does have the ingredients you mention. Lots and lots of ethnic diversity, for sure. When I lived at the north end of Ann Arbor it seemed like English was a minority language at the local Krogers, with Chinese, Japanese and Korean being quite prevalent. And then there’s Dearborn with the nation's largest Middle Eastern community, many of them successful small businessmen.
August 13, 2005 1:32 PM | Reply | Permalink