The Brookings Institution has released a very thought-provoking analysis of the economic strata revealed by this month's Presidential election.
In 2016, we wrote that the 2,584 counties that Trump won generated just 36% of the country’s economic output, whereas the 472 counties Hillary Clinton carried equated to almost two-thirds of the nation’s aggregate economy.
A similar analysis for last week’s election shows these trends continuing, albeit with a different political outcome. This time, Biden’s winning base in 477 counties encompasses fully 70% of America’s economic activity, while Trump’s losing base of 2,497 counties represents just 29% of the economy.
So, while the election’s winner may have changed, the nation’s economic geography remains rigidly divided. Biden captured virtually all of the counties with the biggest economies in the country (depicted by the largest blue tiles in the nearby graphic), including flipping the few that Clinton did not win in 2016.
By contrast, Trump won thousands of counties in small-town and rural communities with correspondingly tiny economies (depicted by the red tiles). Biden’s counties tended to be far more diverse, educated, and white-collar professional, with their aggregate nonwhite and college-educated shares of the economy running to 35% and 36%, respectively, compared to 16% and 25% in counties that voted for Trump.
In short, 2020’s map continues to reflect a striking split between the large, dense, metropolitan counties that voted Democratic and the mostly exurban, small-town, or rural counties that voted Republican. Blue and red America reflect two very different economies: one oriented to diverse, often college-educated workers in professional and digital services occupations, and the other whiter, less-educated, and more dependent on “traditional” industries.
There's more at the link.
Leaving aside the ongoing claims of electoral fraud that might affect the outcome of the election, we're left with one painfully obvious conclusion. The two sides of America, as identified by their voting patterns, are so far apart in terms of composition, background, education, aspirations, etc. that they not only aren't talking to each other - they wouldn't understand each other if they did. That's potentially disastrous for an allegedly United States. How can there be any real Union when effective, meaningful communication has become almost impossible?
Taking an economic view of the red-and-blue chart above, Charles Hugh Smith points out:
70% of America's economy is generated in fewer than 500 counties; the other 2,500 counties are left with the remaining 30%. The nation's productive capital is even more concentrated in a few hands and regions, and since income and political power flow to capital, the financial disparity / inequality far exceed the 70/30 split depicted in this political map.
. . .
America has no plan to reverse this destructive tide. Our leadership's "plan" is benign neglect: just send a monthly stipend of bread and circuses to all the disempowered, decapitalized households, urban and rural, so they can stay out of trouble and not bother the elites' continued pillaging of America and the planet.
There's a lot of big talk about rebuilding infrastructure and the Green New Deal, but our first question must always be: cui bono, to whose benefit? How much of the spending will actually be devoted to changing the rising imbalances between the haves and the have-nots, the ever-richer who profit from rising debt and the ever more decapitalized debt-serfs who are further impoverished by rising debt?
Again, more at the link.
Mr. Smith's last paragraph poses a very astute question. Look at the likely beneficiaries of the so-called 'Green New Deal'. They're overwhelmingly concentrated in the "blue 30%" of counties that supported Joe Biden. They'll actually cause the "red 70%" of counties to lose money, jobs and opportunities, which will be drained into urban concentrations. Can there be a better recipe for generating anger, frustration and - eventually - backlash in those counties?
That backlash can take many forms. I don't want to encourage violence and terrorism, so I won't discuss many of them here; but we've seen more than a few already unleashed within our borders. It's not giving away any secrets to mention the Metcalf sniper attack, or the many other threats to the US power grid and other essential utilities. Almost all such attacks are well within the reach of motivated individuals and groups. Stopping them all will be almost impossible, and effective countermeasures will probably be very expensive - unaffordably and unsustainably so. Every such attack might potentially disrupt the power and/or utility supply to thousands, perhaps tens of thousands of people, as well as factories, distribution hubs, transport systems, etc.
I'm already seeing some sources talking about such activities in the context of "resistance". I can only hope and pray that we haven't reached that point yet . . . but the signs of the times are not comforting. If Antifa and BLM can get away with urban terrorism, rioting and looting, as they have this past year, you can bet your boots that there are those on the other side of the political fence who are thinking of following their example, and getting creative about it.
Peter
One of the problems with the kind of analysis that the Brookings Institute put out, as I would think would be obvious, is that most of the import/export and processing of stuff is located in blue counties, usually along the coast. The raw materials, and especially the food production, is located in predominately red counties. It's a matter of logistics. Ship the raw materials to be processed close to where they'll be sold makes economic sense for the businesses. But if you close off the raw materials, the processors will have nothing to make.
ReplyDeleteI don't want to encourage violence and terrorism, so I won't discuss many of them here.
ReplyDeleteYou already have recently in the context of that little Caucasus war that just ended. Remember that you were referring to a relatively cheap technology, one that more and more countries are pursuing.
It is worth considering that the "blue" region's economy is not based on anything real like manufacturing. It is based on fluff (FIRE, internet services, etc.), not to mention stuff like academia and medical, all of which if not directly subsidized by government spending, has been fueled by the cheap monetary policy by the Federal Reserve since the mid 90's. In other words, the blue economy is FAKE! It is bubble fluff and nothing more.
Reverse it. Trump won in most counties that are agriculturally connected. Trump won the counties where food is grown.
ReplyDeleteAll the high economic counties also have high levels of crime, drug use, homeless and below-poverty-level poor.
And, seriously, this isn't surprising. Just look at the long long long long long list of companies that are major donors to the Democratic Party. They include all those top-economic county businesses.
Never understood businesses that kowtow to the Dems. It's like the oil companies that kowtowed to the Communists in Venezuela...
What Beans said. We feed that 70%. It could get mighty hungry in those blue counties about next winter.
ReplyDeleteIf we deplorables in the red areas were to shut down all the products and services that flow to the red, they would die in short order. We are the source of their wealth even though we are not accorded any respect for that.
ReplyDeleteThe Blue counties represent the oligarchy that rules this nation. They control the media, the internet and other information services despite the fact that we are the primary consumers.
Imagine if we could counter their instruments of control? Imagine if we could create our own systems and news services? If we did, we could easily cause their demise due to their own shortsightedness.
Deurbanization will continue post-covid as more jobs become WFH
ReplyDeleteWhat Beans said.
ReplyDeleteThat red-blue tile pictogram is great.
Now do one for food.
Then for oil.
Get back to us.
This isn't go to go well, nor peacefully.
It's going to go existential in about a New York Minute.
Silicon Valley and Wall Street directly feeds no one.
State capitols and DC even fewer.
The Central Valley, and that wee open spot from Denver to Kansas City, and Fargo to Amarillo rank slightly higher on that totem pole.
To paraphrase Uncle Joe:
"How many chicken farms has the DNC?"
Keep loading those magazines.
They're not going to have time to rust.
It really doesn't matter how much income they generate, if they don't have anyone to grow the food and deliver it. And, if they think they can come get it, they need to consider how the primitive Viet Cong kicked the butts of the most sophisticated military in the world.
ReplyDeleteI hope the commenting is not over on this post, because it is really important. First, quibbles:
ReplyDelete1. Brookings is not an objective source. It is like an article on Bloomberg. You must note the source first. Having said that, it is useful in clarifying the general situation.
2. The population in the "blue" counties is not homogeneous. I would opine that the incomes and wealth is even more unevenly distributed than in the "red" counties. Also, in terms of the financial interests headquartered in blue areas, a lot of the wealth they hold is actually "Main Street USA" wealth, though they do an ever worsening job of serving and managing it. Neither side suffers alone from drug problems and family disintegration.
But the general thrust you have noted accurately. In investment-advisor-speak, the interests of the red and blue areas are not well aligned. The economy is seen, sadly, as a zero-sum game. We need to evolve if we can to where both sides can work for win-win approaches.
As others have said, they may control the money, but they DON'T control food production or the logistics of getting it to them/the ports...
ReplyDeleteInterestingly, one of the bigger agricultural counties in the country is Los Angeles County. Not much is actually grown there but it is where the processors of raw to finished food products have factories. The town I once worked in, not five miles from downtown Los Angeles, had seven meat packing houses. I'm sure there wasn't a hog or steer grown within fifty miles but if you get down wind from a train load of "eastern raised, western dressed corn fed pork" you know it.
ReplyDeleteThe problem the growing areas have is agricultural diversity. Our county raises beef, field corn, wheat, barley, hay, and sugar beets, at least near where I live. Those don't make for a full diet and, with winter coming, nothing is being grown at all. The only processor is the sugar factory and there isn't a meat packer in the state.
The point is, it isn't going to be fun for anyone. The inter-dependency is too great. Of course I believe my chances are better here with no packing house than south of the East LA Interchange with seven.
The desire to have California be gasoline-free in the next decade or so does make sense in the context of decoupling from middle America. This isn't promising. As others have said, the interdependence of the two economies is very high.
ReplyDeleteHistorically, there is a continuum that economies go on. On one end are economies that are highly productive and highly interconnected. When those economies collapse, because they are relatively fragile, the economy moves to the other end. The economy becomes highly localized and independent. Specialization and productivity fall. Usually, the population drops off dramatically as well, both due to shortage of food and a higher mortality rate for several generations. It would be better to avoid a crisis of such magnitude that the economy crashes.
This country has survived crises before. At the end of the Civil War, the South was economically devastated and had to rebuild almost from scratch. A big reason that was possible is that the North was still intact and able to help, and that there were no significant enemies ready to take advantage.
However, it would be better to avoid all that. The danger with the election shenanigans lately is that if the elections are not seen as legitimate, many minority groups will feel disenfranchised and threatened. (In this case, I'm referring to the rural population of the US as a minority.) It doesn't guarantee conflict, but it does get rid of one of the release valves that prevent it.
The next valve in line is limited government power. If there is a Biden administration, and if it enacts legislation or executive orders that are punitive or oppressive to the rural population, and these actions are not limited by the courts, there will be even more feelings of being attacked.
@Sherm,
ReplyDelete1) Processing is not food production. (A classic current example in another vein is Disneyland, and WDInc, which mistook a tourism industry as a license to print money, without factoring in what happens to your corporate empire when you remove tourists from the equation. They're burning through money - in denominations that start with a "B" - like a drunken SecDef, except with no possibility to tax or print more. It will not end well for them, but it very well may end.)
2) Most of the product to process arrives in LA on only about 5 RR lines, and 7 freeways.
Most of those routes pass through vast open stretches of desert nothingness, and mountain ranges in all directions.
Military planners refer to that sort of thing as "Partisan's Wet Dream" territory.
{cf. Iraq and Afghanistan, i.e. our two latest Vietnams}
The rest comes in by ship.
And America doesn't even own its own merchant fleet, and hasn't for 60 years.
So if you wanted to put 4 ground divisions just in Califrutopia to guard LOC and ports, plus the entire Pacific Fleet, you could maybe keep LA and SF supplied, at Berlin Airlift near-starvation levels.
As long as people were willing to ship things in. (A couple of "incidents" with ships, and inbound shipping dries up like rain in the desert too.)
That only uses half the Army and 1/3rd of the Navy for two cities.
Manpower gonna get a bit sparse when you try doing that everywhere else.
This why in warfare, going back forever, cities either go "open", i.e. surrendered without conflict, besieged - think Stalingrad or Beirut - or else conquered forcibly and wiped off the map, a la Carthage.
Factor in how many population centers are in places rather seasonally inhospitable 6 months a year, and throw in questionable energy delivery, and you have a result that's a cross between Antietam and Dachau.
Look at what's happening with people closing shops and businesses and downsizing, because of Kung Flu.
Short your urban real estate stocks, and divest.
Babylon gonna fall.
Aesop I am surprised you didn't mention that a HUGE % of the drinking water in California is piped in.... Let alone the Grid POWER from out of state.
ReplyDeleteHow many days with no or bad water before your dead??? 3+ as I understand it and the last day or so your might as well be dead.
How many hours can those servers go with a rolling black out? A lotta "Profit" going to get lost I suspect.
To summarize:
ReplyDeleteIt is The Hunger Games and the Blues are Capital District.
@Beans: I think that may be the best comment yet on this thread. Very apposite.
ReplyDeleteBased on the "Economic Engine" metric, Delaware is a titan because so many corporations are incorporated in Delaware due to its favorable tax laws.
ReplyDeleteBut is the zip-code that a profit is declared in relate in any real way where the incremental value was created or realized?
California/Silicon Valley is likely to soon learn that capital and human skills are mobile and WILL leave when regimes become too oppressive. Look at all of the highly skilled Jewish people who left central Europe and enriched the US economy in the 1920s and 1930s.
"How can there be any real Union when effective, meaningful communication has become almost impossible?"
ReplyDeleteA master-servant union is still a union, regardless of how fair or unfair it is. As far as effective communication, it's simple - they issue dictates, and us rabble either obey or starve.
It's not really that complex - things are just reverting to the mean of human history. The masters have never had a problem with it; it just sucks for the slaves.
The odds of people waking up sufficiently before it gets to full on master-slave? Not zero, but far too uncomfortably close.
@Glenda: "If we deplorables in the red areas were to shut down all the products and services that flow to the red, they would die in short order. We are the source of their wealth even though we are not accorded any respect for that."
ReplyDeleteAnd the helots in Sparta produced pretty much everything that the Spartans needed, yet who held the whip hand? The samurai and daimyos in Japan produced nothing, the peasantry everything, yet who held the whip hand? It's the same virtually everywhere, throughout all of history. The royals and nobles are above the priests, who are above the merchants, who are above the people who actually do stuff.
@Aesop: "This why in warfare, going back forever, cities either go "open", i.e. surrendered without conflict, besieged - think Stalingrad"
ReplyDeleteUh, you may want to check your sources if you think Stalingrad was surrendered without conflict.
There is one specific industry in each of the largest counties which, if removed from that county, would render that county as moot. Of those industries, they do not 'belong' to that county, which is to say that county did not build the prosperity. It only benefits from that industry.
ReplyDeleteExample: Los Angeles/Long Beach Port of Entry. The industry which services and supplies the Port, even the Port itself, is manifested by the might of the entire nation. The Port does not 'belong' to Los Angeles County. To prove that, all that is necessary is, say truckers and the railroad to stop service into LA County or to not agree to take deliveries from the Port.
The actual relevance of the subject graph is to portend toward the further break up of the nation by depicting an 'us v. them' characterization. The Founders wisely held that all citizens have the right to one vote, their level of prosperity notwithstanding.
How much of this vaunted economic activity is real goods and services?
ReplyDeleteWhen a bank conjures trillions of dollars out of thin air through fractional reserve accounting that's "economic activity".
When a million illegal immigrants per year arrive and demand full benefits that's "economic activity" (and also the basis for the claim immigration strengthens the economy).
When an "artist" makes a crude sculpture of a vagina as a "bold and powerful statement" and it's somehow valued at millions of dollars thats "economic activity".
When computer algorithms on ultra fast fiber networks play funny games with each other buying and selling billions of shares of stock per second that's "economic activity".
Add in the absurd housing costs in these blue areas. A 200 square ft hole in the wall rents for $4000 per month in san fransisco, whereas you could pay the mortgages of four really nice houses with that out where I live. Multiply that imbalance by the huge populations in these cities and just the act of unproductive existence in blue zones is manyfold what it is in red areas.
Not impressed with funny money smoke and mirrors.
May I offer an apparently alternative interpretation of the Brookings Institute analysis?
ReplyDeletehttps://wheretheresawilliam.blogspot.com/2020/11/help-us-obi-wan-elon.html
If your corporate headquarters is in NYC but your 10 plants generating $100 million each are spread around fly over country, NYC get's credit for the $1 billion even though the headquarters in a loss leader.
ReplyDeleteEXXON Mobil headquarters is in Fairfax, VA except for some gas stations, their income comes from everywhere else. Wilmington, DE has a tax advantage for corporations but not much in the way of manufacturing anymore.
Gerry
I like the way Will Brown thinks. Wouldn't help me at my age, but it would be an out for my kids.
ReplyDeleteOn LA, and their water reserves, absent resupply (14 hours), and food reserves absent resupply (24 hours), presents a probkem for the rest of the West if LAs resupply breaks down. Shortages.
ReplyDeleteOnly the first wave of those abandoning LA might actually get out of the Mountain Time Zone, as they will strip all available fuel reserves as they go East.
Furthermore, few cities or towns have the water infrastructure to support the influx of 50-100% more refugees, never mind food.
If LA could spread East evenly, it would double the population of all the cities West of the Missouri/Mississippi rivers. Can't happen, logistically.
Population level logistics are sea, pipeline, and rail, period.
Trucks are good and necessary, but inadequate to be the sole source of transport.
I hope, though I no longer expect, that we can avoid spicy times. Take care as you can
John in Indy
I've been following the comments on this post, which seem to keep on coming in, in which some pretty smart people are imagining some kind of a break with the West Coast, and its reliance on fragile logistical paths from the "real" America. Great. People, this is tactics, checkers if you will. Strategically, chess, if you will, we are still indivisible, and by necessity for national survival. Reading the more recent (and excellent!) Thanksgiving post, in which President Lincoln's proclamation references the desire and plotting of foreign powers to exploit the 1861-65 Civil War, the world is still the same!
ReplyDeleteIf there were somehow a breach between the West Coast and the Northeast from middle America, China would be ashore in force in the Pacific states in five years at the most, and running the place in ten! Once China is onshore in force, and able to import without resistance a few hundred million or so, we will soon all have to learn Chinese, for the short time we would have before we became the Next Nepalese, or Uighurs. If this is not logical, or actually how the world has always worked (and still does), somebody please tell me how I'm incorrect
The Northeast would be making its peace by aligning with the EU in the same way, not that that would last for long.
So we better all find a way to live together!