Posted: Jul 19, 2012, 5:54 PM
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Join Date: Aug 2002
Location: Toronto
Posts: 31,517
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The New Geography Of Success In The U.S. And The Trap Of The 'New Normal'
07/18/2012
By Joel Kotkin
Read More: http://www.newgeography.com/content/...bout+places%29
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Certainly recent economic news of slowing growth and job creation bolster the pessimists’ case. But Americans may face far better prospects than portrayed by our dueling presidential mediocrities. Let’s look at those states that have found their own way out of the “new normal,” in some cases reversing all the losses of the Great Recession and then some.
- The states that have added the most jobs since 2007 — Texas, North Dakota, Louisiana, Oklahoma and Alaska – are located in a vast energy and commodities corridor extending from the western Gulf to the northern tip of the Continent. New York and Washington, D.C., prime beneficiaries of monetary easing and a growing federal government, have also clawed back. But the big winners are in the central energy corridor. Since 2007, Texas has created almost five times as many jobs as New York; California is still down almost 900,000 jobs and Illinois is off close to 300,000. This should represent what Walter Russell Mead calls “a new geography of power,” the anointing of new places Americans and business go to find opportunity.
- Why the energy and agriculture states? Since the onset of the new century, much of the sustained growth in the world has taken place not in the financial or information capitals, but in regions that produce basic commodities like energy and food. In the high-income world, the consistently best-performing countries since 2008 have also tended to be resource-rich ones such as Norway, Australia and Canada. Blue social policies work best when financed by petro-dollars and minerals sales.
- In this neo-Victorian society, the “new normal” means a society dominated by “innovative” or “creative” masters and their chosen, lucky servants. Leave your job and family in the Midwest or Nevada to become a toenail painter in Silicon Valley, San Francisco or Boston. Besides losing any sense of one’s independence, it’s hard to see how a barber or gardener can live decently, particularly with a family, in such expensive places. This bleak reality may not inevitable, though. In many places construction employment is on the rise from its nadir in 2010. This recovery has been a nationwide phenomena but is, not surprisingly, most evident in growth states like Montana, Colorado, Indiana, Iowa, Nebraska, Tennessee and Utah.
- Over the past two years Michigan and Ohio have experienced the biggest drop in unemployment of any states in the union; Michigan leads the way with a drop of almost five percentage points, while Ohio comes in second with a nearly three-point decline. Other key Great Lakes battlegrounds—Wisconsin, Indiana and arguably Missouri—have also seen two-point drops in their unemployment numbers. Why is this happening? A lot of it has to do with business-friendly state regimes.
- Unlike Illinois, increasingly the sad sack of the Midwest, these states have cut taxes, worked to increase the availability of skill training and streamlined regulations. This has allowed them to take advantage of new opportunities. Improving the business climate represents the third critical element for overcoming the new normal. Most rundowns of the states with consistently favorable business and tax climates – as judged by executives — start with Texas, Utah and South Dakota. Many states that are recovering best from the recession, like Louisiana, Wisconsin, Florida, Ohio, Michigan and Arizona, all have been improving their rankings in business surveys over recent years.
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