Real America

Here's a county level map of presidential voting in 2004:















Here's a similar map for this election:












Not that much changed, though Obama made incremental progress in many places. Here, however, is where McCain did better than Republicans in 2004. Arizona and Alaska make sense, and of course southern Lousiana lost a lot of black Democrats. But McCain made his pickups almost exclusively in a particular geography--the upland south.



This is a rough breakdown of that region. It's a pretty distinctive part of the South. Slavery was never big here; there is virtually a total complement between this and the following graph.










The share of African-Americans.












Similarly, this is also where Bill Clinton won his votes in the Democrat primary (purple is where he won > 65% of the vote). Hillary Clinton did very well here in those areas as well.
















This gets at ethnic breakdown in this area. This is be a bit hard to read, but basically the plurality ethnic group reported to the census here is "American"--these people are Scotch-Irish who predominately identify by nationality. The regions where such groups are numerous map very strongly to those places where McCain/Palin grew the Republican vote share. Household incomes tend to be fairly low, with some of the biggest pockets of isolated poverty anywhere in the country.

Presumably this reflects the impact of adding Palin to the ticket. You have cultural identification by "real Americans," a strong evangelical turnout, and racism, though I suspect Condoleezza Rice or Colin Powell would do well here. Further South, record turnout of black voters pushed Obama's share upwards, while further North, social conservatism, broadly, is a smaller force.

This illustrates the point that the South is both "larger" and "smaller" than people think. The Deep South plantation economy was restricted to the far southern geographies where that was economically viable, while broader southern culture is shared by a larger community of Scotch-Irish that stretches into Ohio and Pennsylvania.

Politically, it doesn't seem to make a lot of sense in retrospect for Republicans to double down on this demographic. One of the post-election quotes from MN governor Pawlenty caught my attention. The original Sam's Club Republican was caught saying that his party needs to focus on attracting women, Hispanics, blacks, and young people. Well. What demographics was your party targeting to begin with?

The young vote doesn't bode well for them, as young people these days are fairly liberal on a range of economic and social issues. Some of this will obviously fade away over time, but the social liberal bit will probably stay; roughly, every generation moves out a step more liberal than the previous one and stays there. The cost of catering to the real Americans is felt in the plummeting support Republicans see among young voters, minority voters, and the educated. Obviously, these groups are pretty large and growing, while whole communities of Rockefeller Republicans are going extinct. The electoral benefits are pretty slim, as the bordering states were Republican anyway. The Republicans faced a very bad fundamental position and were probably going to lose barring some crisis. But McCain's decision to head even further right after winning the Republican nomination, target this crowd through a VP pick, and then run a campaign centered on inconsequential right-wing dogma points and attack ads did little to endear him to the broad swaths of American independents who swing randomly from party to party, and for whom McCain is actually fairly popular. It's enough to make you nostalgic for some Rovian tactics. At least he realized that you need more than half of the population to win, even if hubris over statistically dubious "political realignments" did them in.

More New South

Thanks to those of you (especially Chris) who had things to say about the South.  To the left is some data that gets at the point I'm trying to make.  You have a graph of per capita personal income growth relative to 1948--so this is measuring post-WWII regional disparities in growth.  The Southern states appear to be moving in unison faster than the other plotted "blue" states like California and Illinois.   

Obviously, some of this is catch-up, as the South was relatively undeveloped for a while and then various changes made it economical for companies to take advantage of the income differential.  But the development literature is also clear that convergence requires meeting certain hurdles.  Going back to 1948, armed with knowledge of future trends in services, manufacturing, and agriculture, I think you'd be hard pressed to imagine the South as a leading area of growth in the country, but that's in fact what has happened.

So then the question is why did this happen.  Here is a long list of potential explanations, implicating among others a big push in infrastructure, human capital development (the Rockefeller-funded hookworm and malaria eradication projects were also useful), climate, and of course AC.  I find these explanations slightly ad hoc and they really seem to beg the question, while also better at explaining the earlier takeoff rather than the current trajectory.  My suspicion is that within a country like the U.S., state-level institutional differences explain at least some of the difference.  

And there is in fact a political explanation which largely makes my point by arguing that the breakdown of the Democrat majority after 1960 spurred economic growth.  While I emphasized Republicans, the point is really more about the changing electoral dynamics and the growing political power of people who do not have quite the entrenched economic interests as people elsewhere in the country (though if I read the paper right, the Republicans do have a larger impact on growth).  So the argument is that the South grew because it got better political leadership which prioritized high-growth policies, though of course other things were involved.  

If you look at the right of the graph, you'll see that the growth gap appears large and growing (though blue states remain richer).  These are very partisan viewpoints, but they argue fairly convincingly that Southern states are doing well and Blue/Rust Belt states are not doing so well.  In some sense it's no surprise that the Chicago politician sees a bad economic climate and the Arizona senator sees good fundamentals.  Of course assigning causality is hard, but it's much easier on a state level--where governors can get legislation passed and attract businesses--than on a national level, where all one really has to do is not make too many mistakes and hope you get lucky.  

If you really believe these results, they point to a radically different American regional differentials.  This New Yorker article is an interesting view on Rust Belt/Appalachia and their future prospects.  They really don't look great, and I somehow doubt that Presidential politics--which was the focus of the piece--is really going to change that.  Of course, there are really two issues here.  One is the increasing regulatory and business advantage certain states hold, and the other is the continued breakdown of the American family.  The second is a lot more important--I know of no community in this country that doesn't prioritize stable families, education, and hard work that isn't doing pretty well for themselves--but the first is much more open to political change.  But again that comes from the grassroots, and the South was lucky in that it lacked the unions and pork and could jump ahead to the jucier bits of development.  It's hard to imagine this happening in many struggling states and cities, which seem to face single-party dominance and not much of a constitutency for change (more of the same?).  

The overall situation here seems to be a global trend, in which the world as a whole converges with substantial hetergeneity on political and cultural grounds.  India is a good comparison as a pluralist democracy with substantial political devolution of powers to states.  And you see the better run states getting better while other struggle.  Freer markets seem to accelerate this process; amplifying the gains while making it harder to deny people their rationalizable worth.  Many people see a "race to the bottom" but optimistically, the incentives are there for everyone to govern and produce better.

The New South

There is no guarantee that the following makes any sense.  

Many people are interested in the notion of economic convergence.  Economic theory predicts that in the long-run, all economies should move to the frontier of development.  So Japan meets the West, expands a lot, and now has has the same standard of living as other rich countries while growing at the same rate.  Obviously this doesn't happen everywhere, and the question is whether the sources of those differences lie in genetics, culture, institutions, policy, or something else.  

One such convergence situation is the post-WWII behavior of the American South.  The South had always lagged the North in development, but this was earlier a geographical issue as the Southern plains attracted the Barbados-based plantation elite while the North pursued trade and manufacturing.  This gap continued.  The geographical barrier to convergence disappeared with a higher level of technology, and the fact that the South and the North are in the same country mean that a lot of other barriers to convergence were not a big deal.  The main barriers to there being similar economies in the North and South became institutional and related to the quality of governance.  

My argument is that ultimately changing institutions created the "New South," and that this really started to change with the political dominance of a group of socially conservative Democrats and Republicans in the '60s with a constituency broadly in favor of different economic ideas.  The shape of this new ideology--Goldwater Republicanism--was formed by many things.  There was an influx of Northerners.  Broadly, there were push and pull dynamics creating essentially a new party.  On a more national level, this is covered negatively by people like Krugman, who sees a basically racist Southern strategy, and more positively by people like Brooks or Douthat.  

The push factors include the racial fallout of the Civil Rights movement, which both increased Democrat votes from black voters and shifted many white voters into the Republican Party.  Liberal judicial decisions were another factor, from busing (again, more racial stuff, but one that lead to more private schooling, which was Christian, and so led to more evangelicalism) to Roe v. Wade.  The growing Christian gap would become a larger factor later on.  There were pull factors as well, as the newly constituted Republican Party was better able to attract natural conservatives, with their focus on law and order issues, taxes, welfare, cultural topics, and so forth.  I can imagine tipping effects, in which more and more conservatives join the Republican Party, which markets itself as more Republican, and so forth.  It's easy to call this racism, but it seems to me a more basic consequence of a pluralist society.  Societies riveted by ethno-linguistic divisions display much less social trust as a whole, and tend to have less redistributionist institutions.  This is not necessarily linked to race, look at India, in which caste divisions behave politically much like ethnic rivalries, and really hamper coherent policies.  

The product of these forces was to yield a much more ideologically consistent and partisan set of political parties in the south.  With a median voter that's conservative in the South, you end up with rotating conservative Democrat and staunch Republican governance.  The traditional base of the new conservatives consisted exactly of the sort of people open to a more upwardly mobile, free enterprise system of government, so an economic conservative approach became a natural fit to this program.  

Of course, the development of the "New South" had to do with many things, among them the rising importance of service industries not linked to geography, technology, AC, highways, and the positive impacts of Civil Rights bills in desegregating the population.  But many of the proximate causes of the convergence between North and South needed to take place in a tolerable institutional environment, which was then supplied by the new Republican governors.  Low-tax regimes, opposition to union labor, State subsidies, spending on infrastructure, education, and research, and so forth attracted an array of manufacturing (car manufacturing) and service (banking, telecom) interest; even as many economic fundamentals were in long-term decline (textiles, furniture, cotton, agriculture).  

With the recent transformation of the Republican Party into the Party of the South, it's popular to talk about how the social hangups of Southerners have become the stuff of national cultural wars.  But it's interesting to see that the institutional barriers between North and South has largely revesed itself with the South in an arguably better position.  There have been some attempts to take on the old guard in blue areas--especially by moderate Republicans like Romney, Bloomberg, Giulianni, and Schwarzenegger, and some moderate Democrat responses like Daley, Spitzer, and Cory Booker (Are these attempts to be a Clinton Democrat on a more local level?).  But largely, Blue states continue to hemorrhage people and jobs to the Sun Belt.  This election continues in many ways that trend, with the choice between a Chicago politician who promises more regulation, higher taxes, and a host of industrial policy technocrat intitiatives to solve problems in health care, energy, and education and an Arizonan politician who combines sufficient deferrence to the socially conservative wing of the party with a support for lower taxes and less regulation.

The ultimate consequence of this state variation in development policies is the Housing Bubble.  In some sense, it's a myth that we had a "national Housing Bubble"; it remained in many ways a regional problem with certain areas like California, New York, Chicagoland, and (yes, somewhat counter to the point) Florida.  Tight land regulations in these areas artificially inflated the value of land, creating the actual housing "bubble" that encouraged poor lending tactics and eventually the securitization problem.  Places like Texas, Georgia, Arizona or othern Southern areas that don't have quite the zoning regimen had a flexible response to demand in housing and so never suffered quite the price movement up or down.  These places are really being spared the worst of the current problems, while continuing to attract more corporate headquarters and operations.  Another housing implication is that since Democrats generally run cities, and since Democrats generally favor regulations, you have city-level housing markets that are absolutely horrible, with the attending higher housing prices diminishing to a large extent the value of a College degree (since of course you don't attend a top-tier school and move to Nebraska).  

Of course, the old Democrat holdouts are still home to some of the most amazingly productive sectors of the economy (Sillicon Valley, New York) with the associated Universities and so forth.  So the combination of highly productive people with an increasingly pushed middle class yields greater inequality issues in Blue States, and then of course that's all they talk about.  You could probably make the case that what Blue States now need is Republican governance, and Red States some Democrat policies.  

One reason for the general success of the Republican method is that state-level government has many different spending priorities and issues than on the national level.  And since state governments can't hold a deficit; national-level Republicans have of course run up the national debt, while state-level Republicans have not.  So while the national level assessment of Republicans is mixed--they might have saved the economy from turning into Europe, but they also messed up a lot of stuff on spending--the state-level economic assessment tends more positive.  

I think the crucial point is not that the Republicans are smarter, but that the people who vote for them are generally social aspirers open to new business with little personal stake in bureaucratic pork, which leads to broader support of a certain free-enterprise economic agenda, combined with the fact that the Republican talent pool is incorporating business-minded people.  Look at the ranks of prominent Southern state-level Republican politicians, and you see both a bias for religion and business.  Bush fit this model rather well, what with his MBA and so forth.  Of course you still have the lawyers (in America and Britain, politicans are chosen from the stock of lawyers, while in Korea and Germany it tends to be engineers), but it still seems to me a contrast between the sorts of people who have run Democrat machines in other parts of the country.  Edwards, Hillary, and Obama were all of course lawyers (on the other side, you have Romney a businessman-turned-governor, Huckabee a rather effective preacher-turned-governor, and so forth) and the primary race at times really felt like a battle between the UNC-educated lawyer who specializes in court cases and the Ivy-trained lawyers who focus a bit more on the academic stuff.  Arguably, neither group is really set to run an economy.  Corruption seems like an inevitable outcome, but really no one cares about corruption paired with actual development. 

I guess one of the things this is a reaction to is the notion that economic conservatism is just a really bad idea that was pushed on the Americd toan people, with universal devastating consequences.  I hear this from a lot of people, who just can't imagine that the Regan/Bush gang were really anything but absolutely horrible.  I ten push a little against this idea.  

Update:  There is also the cultural change in the South where more people become evangelical Christian and that starts to matter.  Is that another factor?

I'd love feedback on this to figure out whether to actually pursue this idea.