Its key finding: We’re in the grip of a paradox. Even as areas that vote Republican continue falling behind blue America economically — helping widen those oft-discussed regional inequalities between cosmopolitan and outlying areas — GOP elites everywhere are growing more committed to an increasingly uniform and regressive agenda that does little to address the problem.
“Red America is falling farther behind, but the politicians who represent it at all levels have gotten more unified on an economic agenda that hurts the people who live there,” Jacob Hacker, the Yale political scientist who co-authored the analysis, told me.
The $1.9 trillion package includes large stimulus checks to most individuals, extended unemployment benefits, a big infusion of aid to state governments, and a new child cash allowance that could cut childhood poverty in half.
Every Senate and House Republican voted against the package. Yet this sort of ambitious agenda will help address the deepening regional inequalities that have become such an intense preoccupation in our politics.
The ‘great convergence’ is over
The new analysis — which was shared with this blog and is also co-authored by political scientists Jacob Grumbach and Paul Pierson for a forthcoming book on American political economy — brings deep historical context to this problem.
For decades throughout the 20th century, it notes, the industrial economy — combined with large federal expenditures, particularly in the South — drove a “great economic convergence,” in which poorer states steadily caught up with better-off ones.
But more recently, the development of the knowledge economy, whose benefits are largely concentrated in cosmopolitan hubs, has reversed this trend. Meanwhile, in many red states — mostly in the South — the model of weak unions and low wages, which made them competitive for business inside the national market, is faltering in the face of globalized production.
“Blue America is increasingly buoyed by the knowledge economy,” the analysis concludes, while “red America is struggling to find a viable growth model for the twenty-first century.”
How did this happen? A big part of the problem, the authors argue, is conservative governance.
‘Low road states’
The analysis looks at the political economy of 26 states that voted Republican in presidential elections three times since 2000. Of those, 21 are what the authors call “low road states.”
Mostly Southern, they largely maintain that model centered on weak unions and low wages, and tend to have smaller governments and far fewer urban centers.
Tellingly, the authors find, those states have aggregate wage averages that rank below those in the states that voted blue three times since 2000 (though vast inequalities persist within those blue states). The red states that come closest to blue states (like Texas) have dense urban centers.
Another group — “left behind states” — are the ones in the industrial Midwest. They, too, are struggling in the knowledge economy. But they have legacies of progressive policies strengthening unions and public spending (though GOP lawmakers have recently undermined these).
By contrast, the “low road states” still labor under the legacies of “conservative governance,” which include lower minimum wages, anti-union policies, and underfunded education and infrastructure.
What red states should want
To address resulting regional disparities, the analysis argues, these states should want expanded federal cash transfers and bigger federal spending on health care, social insurance and infrastructure. But that’s not happening:
Instead, red state politicians have increasingly embraced a national agenda that is focused on tax cuts and aggressive deregulation and hostile to federal transfers.
Why? Because GOP policy at the federal and state levels is largely set by “national business groups and organized wealthy backers.” This undercuts “the prospects for robust intergovernmental transfers, both to spur local economic development and to finance the social programs” on which poorer, nonurban voters “increasingly rely.”
Consider the rescue package. It would provide a boost in financial assistance for people who get health insurance through the Affordable Care Act’s exchanges. Those are people who might be struggling to afford health care amid the current economy, many in red states.
Yet Republicans uniformly voted against this, after spending years trying to repeal the ACA with no alternative vision, and even as many red states have still refused to take federal money to expand Medicaid.
Meanwhile, the rescue package’s child allowance is the sort of policy that “conservative populist” Republicans who want to wean the GOP off its addiction to plutocratic policies should support.
Indeed, as Samuel Hammond of the Niskanen Center points out, while Republicans used to pillory child welfare as a problem of the urban underclass, this child allowance would give a big lift to many rural white families. But their GOP representatives have now voted against it.
The ultimate paradox here may be this. As the analysis concludes, GOP political elites are able to continue insulating themselves from accountability for this disconnect, not just “through identity appeals rooted in racial and cultural backlash,” but also because of the bias “of the American electoral system toward nonurban areas.”
“Republicans enjoy a huge advantage because the Senate overweights rural areas and because Democratic voters are packed into urban areas, which is made worse by gerrymandering,” Hacker told me. “The tragic irony is that this huge rural bias also helps Republicans get away with ignoring the economic needs of their own constituents.”