Monday, March 14, 2016

What Are Their Self-Interests Anyway?

It has been a long time since I wrote a post. I started a new job as an auditor and that has been leaving me sufficiently occupied to not feel the bug to write. It has also meant this has taken a rather long time to finish writing, I have retained references from before it was obvious Trump would dominate the Republican primary. I must also note that I am not trying to explain Trump here, his appeal does not appear to differ significantly between rural and urban areas, but rather to look at how the Republican Party as a whole may be representing the interests of the people that vote for them and not just the donor class.

However, I have been bothered by the re-emergence, more so in comment threads than in articles or blog posts, that right wing voters do not recognize or vote for their own best interest. I have read some excellent writing on how class and race play into this to define interests beyond income but what really jumps out at me regarding the identify of the right wing are maps like this which shows how concentrated Democratic voters are, primarily in urban counties, though the northeast and some other areas are exceptions:

2012 Presidential Election by County.svg
"2012 Presidential Election by County" by Kelvinsong - Own work. Licensed under CC0 via Commons.

This leads me to believe that to understand what is happening in the right wing, and with political polarization more generally, we need to look through the lens of rural vs. urban America. The lenses of class and race, while relevant to these problems, miss many aspects of the urban and rural divide.

Looking through this lens we see very different lived experiences. While Obama could rightly state during his State of the Union Address that the US unemployment rate has been cut in half during his presidency this likely rang hollow to many rural voters. While US urban employment had risen above its pre-recession level by 2014, rural employment remained 3.2 points below its pre-recessionary level in 2015 (page 1 and 2). Furthermore, the period of 2010-2014 marks the first time that rural America as a whole has faced population declines, with a loss of 116,000 people over this period. While overall poverty rates are comparable with past history in rural areas, the poverty rate for children living in rural areas has continued to climb through the recession and recovery, from 21.9% in 2007 to 24.2% in 2009 and to a further 25.2% in 2014 (page 3). Poverty in working age adults has risen from 14.6% in 2007 to 17.6% in 2014 (page 3). This was offset in declines in poverty rates among seniors. (both links in the paragraph are to USDA Rural America at a Glance report)

These statistics reflect a reality that many liberal pundits are missing when they react to Republican statements such as Bush's "The idea that somehow we're better off today than the day that Barack Obama was inaugurated president of the United States is totally an alternative universe," or Kasich's "In this country, people are concerned about their economic future... And they wonder whether somebody is getting something to — keeping them from getting it." A few hours outside their urban liberal bastions lies an America a few hours outside of urban America which has a declining population, job numbers that haven't recovered to pre-recession levels, businesses permanently closed, and at least in some areas (my knowledge is anecdotal) property values which continue to decline. (quotes from MotherJones, also see MSNBC for another liberal article striking the same theme) While these statements do not reflect America as a whole, I have little doubt that many conservative politicians are hearing from supporters who feel everything is getting worse for themselves and for just about everyone like them. They aren't sharing even in the little bit of prosperity being experienced in urban and suburban areas, instead they are in both absolute and relative decline. They feel that people not like them, and from the rhetoric I think this would include urban hipsters and pundits as well as other groups, are receiving all the gains and that they are being left out. In their view, they want to be listened to and important, like they were through most of America's history, and resent being left behind.

In addition to this recent decline, liberals should consider that rural areas, particularly in the south, had very different experiences in the past as well. Liberals tend to hold up the high wage, high security union jobs in the rust belt cities as an ideal to go back to, however, much of the initial de-industrialization came from competition from more rural, and particularly southern and western, areas where companies could pay lower wages and labor had more difficulty organizing. The experiences of these areas was that union-busting and long, hard work for less saved towns and small cities that seemed doomed due to declining employment in agriculture and other resource extracting activities. Many corporations and businessmen who would be decried by liberals for their labor practices are looked at much more positively by people that depend on that plant for the survival of their town.

This translates into support for policies that liberals consistently claim is not in these people's best interests. However, if your interest is in preserving your community, your property, and your way of life it may be entirely consistent to support low taxes on the rich, low wages, and low regulation; after all, these are the policies that attracted to the local factory to your town in the first place. It may seem very likely in these cases that supporting more of the same is the only path forward that would preserve the things these people value most.

Now, we can recognize that this was always an unstable equilibrium. In practice companies used these areas as leverage to lower labor standards, environmental regulation, and wages throughout the U.S.; for instance 25 states now have right to work laws removing the comparative advantage that states gained by pioneering these laws. Wage growth has been slow for decades eroding the cost differences between states for low skill manufacturing jobs. Furthermore, international competition has left a very small gap in which these companies can exist, there has to be a reason for these companies to stay in the US rather than seek even lower wages elsewhere but not a need for them to locate in a higher productivity area with more access to specialized skills. For the US as a whole, trying to be a low cost competitor means pay cuts and a much worse quality of life to most of us, but it may be entirely consistent that pursuing this strategy would be in the interest of rural communities having trouble competing in the modern economy.*

But what alternative do rural areas have? Even in the best days their low wage, low tax strategy meant that they never had the revenue necessary to build up the infrastructure, institutions, and human capital necessary to be competitive in the knowledge economy. Due to these deficits in investment as well as the disadvantage of low population density, these rural communities lack the diversity of skilled professionals needed to staff a well managed business as well as lacking the close proximity to related businesses and customers that fosters innovation. A movement back towards unionization, higher wages, and stricter regulation on a nationwide scale threatens the only business model available to these communities, in these conditions what business would choose not to locate near an urban area?

These concerns also tie in with the cultural issues that have become so prominent in Republican rhetoric. This subject deserves a full post on its own, which I may or may not get around to writing, but reading a lot of Rod Dreher ( and Ross Douthat ( has caused me to reflect on how modern values are causing great harm to some communities. However, their perspective runs into the fact that, in aggregate, kids these days are doing better on pretty much everything (see Healthcare Triage for the most recent thing I've seen on this). In aggregate, adults are doing better too, crime rates are down and marriages are more stable. My view on this is increasingly shaped by an urban vs rural divide, traditional morality taught how to live life in a small, rural community. The modern norms we see developing through campus protests and other forms of activism are about how to live in a modern, urban setting. But only one of the two sets can be normative across a society as a whole, and as urban and suburban views become more dominant people that live in and prefer small town and rural life naturally feel dislocated and marginalized.

These issues have created a large minority who are left feeling that no one is responding to their problems. Despite net income flows to their communities from government they see the communities they live in crumbling around them. They grew up with an image of small town America being America's true self, they feel dislocated in a country that is increasingly presenting a suburban and urban face to the world. They don't see either government or business responding to their concerns, and they are very, very angry about this especially because they see their version of America as being the true America, and they can point to support going back to Thomas Jefferson for this view. They are looking for someone to blame for their fall from influence, it appears that it has become easy to focus this on outsiders but they also cast blame on moochers in their midst, such as those receiving government assistance. It would be hard for them to admit that there is simply no way to develop these areas and that many of those on government assistance are likely those who feel too closely tied to their community to look elsewhere for work.

This leads to the deep problem however, there is no plausible policy path within US political traditions to help these regions. A report by the St. Louis Fed finds that convergence to the national average income across people is driven by urbanization, they find that non-metros areas converge to a lower income. They state the prospects for non-metro areas very bluntly, "Our results provide evidence that the idea of preserving rural economies while achieving significant gains in per capita income (or slowing divergence) in the long run appears to be far-fetched." (Income Convergence and in the United States, page 12) It is worth noting that things have only gotten worse in rural areas since 2008 relative to the rest of the United States. Most policy paths that could have helped are now no longer possible, I remember back when I was an undergrad taking economics courses hearing about how terrible the employment preserving European Common Agricultural Policy was compared to our efficiency focused policies; however, as I grow older I am forced to reflect on the fact that an awful lot of people desire to live in rural communities and that it is rather peculiar that our socio-economic system has little way of prioritizing how people want to live but instead only what they want to purchase. People feel the political system has failed them because it cannot preserve their communities, they are enraged because they see that the political system is helping many people build and maintain stable communities in urban areas; communities they do not desire to be part of. Ultimately, however, I don't see how the system can respond to their desires. Even a Japan style massive building program would be temporary and it wouldn't stop the kids from wanting to leave. Government can help stabilize urban communities because they ultimately have the density to support the modern, highly complex production process that businesses require to be competitive. Rural areas don't so there is no political fix available.

You can get mad and you can block responses to the problems of an increasingly urbanized America trying to adapt to the dominance of multi-national firms, but there just isn't anything to bring back a country dominated by small towns and small businesses so there is nothing for a political party focused on America's small towns and rural areas to do but block and obstruct. The problems these areas face aren't fixable so the party that does nothing is acting in the interests of their constituents by doing the only thing they can, holding back everyone else so they at least lose slower than they would if America's problems were addressed. And with no prospect for better wages in an area whose competitive advantage is low costs, a tax cut may represent the only chance for an increase in real take home pay, so there's some small prospect of improvement there.

*I don't mean for it to sound like all rural areas are suffering. Rural areas blessed with outdoor amenities are doing quite well. In addition to attracting tourists they also attract well educated individuals lucky enough to have jobs that they can do remotely. However, this does nothing for an old coal town or agricultural community, instead it generally means the growth of new areas and the growth of these new communities is likely masking an even sharper decline in the health of older rural communities in the aggregate statistics.