Wealthy coastal states tend to vote for Democrats. Therefore, Democratic economic policies are superior.If this reasoning sounds fallacious, that’s because it is. And yet it is the main argument of a widely-praised New York Times op-ed published last week by two of America’s leading political scientists, Jacob Hacker and Paul Pierson:
Mr. Trump and House Speaker Paul Ryan are united by the conviction that cutting taxes — especially on corporations and the wealthy — is what drives growth.A look at the states, however, suggests that they’re wrong. Red states dominated by Republicans embrace cut and extract. Blue states dominated by Democrats do much more to maintain their investments in education, infrastructure, urban quality of life and human services — investments typically financed through more progressive state and local taxes. And despite what you may have heard, blue states are generally doing better.
Put aside the fact that blue states have higher levels of economic inequality than red states, and that blue state spending has been fueled in part by massive public sector pension deficits (Hacker and Pierson mention this but brush it off). Put aside the fact that, according to Richard Florida, “red states, like Texas, Georgia and Utah, have done a better job over all of offering a higher standard of living relative to housing costs.” And put aside the decision to depict “Red America” as a monolith rather than a demographically, culturally, and historically diverse grouping of regions ranging from Appalachia (a major source of red state economic underperformance) to the more prosperous Great Plains and Mountain West.The fatal flaw with Hacker and Pierson’s effort to demonstrate the fundamental defectiveness of Republican economic policies is even easier to spot than these objections: It doesn’t distinguish correlation from causation. We are supposed to assume that states like New York have high per capita incomes because they are governed by Democrats, and that states like Kentucky have lower per capita incomes because they are governed by Republicans. In fact, it may be that there is some third unaccounted-for variable (like geography or birthrate or immigration) or even that the causation runs in the opposite direction: That New York prefers Democrats because it is wealthy, and that Kentucky prefers Republicans because it is not.It’s well-known that the Democratic social platform is more appealing to wealthy Americans than to the working class. Strict gun controls, mass immigration, and abortion permissiveness is attractive to elites in places like San Francisco, who are culturally averse to guns, who are largely shielded from any negative effects from less-skilled immigration, and who are generally secular and unmoved by religious appeals. Moreover, the higher levels of government intervention in the economy that Hacker and Pierson tout as the key to economic growth—licensing laws, zoning restrictions, higher education subsidies, anti-competitive regulations—often help the well-off at the expense of the middle-class.It could just be that the Democrats’ two-pronged appeal to the top and the bottom is more politically successful in high-inequality blue states, while the populist Republican appeal to the middle is more successful in more egalitarian red states. Sure, this explanation is simplistic, but no more so than Hacker and Pierson’s reductive account of the roaring success of liberalism (and the epic failure of limited government) in promoting economic growth.Why do Hacker and Pierson presume that states’ politics determine their economic fortunes, rather than the other way around? And why did so many in the media accept their conclusions so readily (at least on social media)? One reason may be that, as Lee Drutman wrote at Vox, “Democrats are replacing Republicans as the preferred party of the very wealthy.” Successful professionals, who are increasingly concentrated in cities, are adopting more liberal attitudes, especially on issues related to culture wars, multiculturalism, and globalization. For partisans who have always conceived of themselves as champions of the vulnerable and the oppressed, this is an uncomfortable fact to grapple with.