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Brad DeLong's Grasping Reality 2019-06-10 22:11:55

Summary:
I wouldn't call it "crashing", but... And it is not just the south: Wisconsin and Kansas joined, and Michigan and Indiana and Ohio are teetering on the edge: John Cole: The Decline of the South: "...Good piece in the WSJ about the crashing economy in the south": Sharon Nunn: The South’s Economy Is Falling Behind: ‘All of a Sudden the Money Stops Flowing’: "Since 2009, the South’s convergence has turned to divergence, as the region recorded the country’s slowest growth in output and wages, the lowest labor-force participation rate and the highest unemployment rate.... Low taxes and low wages that attracted factories and blue-collar jobs—have proven inadequate in an expanding economy where the forces of globalization favor cities with concentrations of capital and educated workers.

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I wouldn't call it "crashing", but... And it is not just the south: Wisconsin and Kansas joined, and Michigan and Indiana and Ohio are teetering on the edge:

John Cole: The Decline of the South: "...Good piece in the WSJ about the crashing economy in the south":

Sharon Nunn: The South’s Economy Is Falling Behind: ‘All of a Sudden the Money Stops Flowing’: "Since 2009, the South’s convergence has turned to divergence, as the region recorded the country’s slowest growth in output and wages, the lowest labor-force participation rate and the highest unemployment rate.... Low taxes and low wages that attracted factories and blue-collar jobs—have proven inadequate in an expanding economy where the forces of globalization favor cities with concentrations of capital and educated workers. 'Those policies worked before, then they became fundamental constraints on the [South’s] long-term growth', said Richard Florida, an urbanization expert at the University of Toronto.... In part because of its legacy of racial segregation the region has, relative to others, underinvested in human capital.... Against the Northeast...the South’s per capita income peaked at 79.1% of the Northeast’s level, and has since fallen to 71.6%.... Sunbelt cities like Charlotte and Atlanta have attracted both wealthier white-collar workers and retirees....Texas, with its own unique economy... is relatively urban, with five major metro centers... a thriving tech sector and ample reserves of oil and gas....Many economists say the most effective way for the South to regain its momentum would be to invest more in education, which would over time create a more skilled workforce to attract employers. But Mississippi State University economist Alan Barefield notes that is difficult to reconcile with southern states’ historic desire to keep spending and taxes low...

Bradford DeLong
J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.

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