Two stories out this week show just how desperately America needs to get beyond the simplistic answers of both the red and blue models. First up, in the LA Times, Chris Kirkham reports that many lower- and middle-income citizens who can no longer afford to live in California are leaving for other states:
A snapshot of more recent U.S. Census migration numbers shows that nearly three-quarters of those who have left California for other states since 2007 earn less than $50,000 a year.Experts point to the state’s increasingly unaffordable real estate markets as a major driver of the trends. More than half of the nation’s 50 most expensive residential real estate markets are in California, according to Coldwell Banker’s Home Listing Report, including nine of the top 10.
The way that less affluent Californians are increasingly excluded from the housing market and eventually forced to leave the state is an ironic outcome for a state that has been the foremost champion of blue model governance—a model explicitly premised upon helping the middle classes. Yet restrictive housing regulations and zoning rules as well as high property taxes, among other policies, combine to send costs skyrocketing in blue cities, forcing out many middle class residents. Not that the state doesn’t benefit: Tax receipts are up, as high-tech firms and their highly educated workforce settle down in cities tailored increasingly to their needs alone. Blue leaders are not blind to this dynamic. Mayor Bloomberg was once caught saying that “if we could get every billionaire around the world to move here [NYC] it would be a godsend.” This income-based segregation has become one of the most notable features of blue rule, and is as definitive an indictment of blue policies as you can find.But red states are hardly without problems of their own. If blue rhetoric has always been about helping the poor, red rhetoric has been about creating economic growth and opportunity. According to a piece in the Kansas City Star last week, Sam Brownback’s initiatives, which some Tea Party-types see as the gold standard of red-state reform thinking, are creating serious problems without delivering the hoped-for benefits:
- A state judicial panel has ruled that the state’s school system is being underfunded by at least $500 million a year, even as the state finds itself $1.1 billion in the hole due to income tax cuts;
- There is new data showing that the state’s tax receipts are $15 million dollars lower than expected in December (on top of previous shortfalls);
- And a federal report on jobs is out, showing much more robust growth in neighboring Missouri than Kansas, despite Brownback’s insistence that a more favorable tax regime would cause the balance to shift decidedly in Kansas’ favor.
Pro-Brownback pundits have disputed much of this, but it doesn’t look good overall. Instead of tax cuts creating huge gains in jobs or prosperity, you get underfunding and cutbacks of services people actually like.One of America’s great strengths is that its states can serve as these kinds of laboratories for policy initiatives—and that’s all fine and good. But as we all know from high school chemistry, sometimes experiments don’t work out. The step after that is the most crucial: abandoning your dearest expectations and finding new ideas to test. Neither the blue team nor the red team have the solutions for the 21st century, and as we’ve said before, it’s time for both to think creatively about what comes next.