Red State Solutions For Blue State Problems

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Conservative Cabbie

Filed Under American Politics

Barack Obama and the Democrats in Congress are proposing “blue state” solutions for the problems facing America today. Increased regulation, universal health care, heavy government spending and climate change legislation. But if one is too look at the different states in America, one can see that this may be exactly the wrong thing to do. Ross Douthat has done precisely that:

Consider Texas and California. In the Bush years, liberal polemicists turned the president’s home state — pious, lightly regulated, stingy with public services and mad for sprawl — into a symbol of everything that was barbaric about Republican America. Meanwhile, California, always liberalism’s favorite laboratory, was passing global-warming legislation, pouring billions into stem-cell research, and seemed to be negotiating its way toward universal health care.

But flash forward to the current recession, and suddenly Texas looks like a model citizen. The Lone Star kept growing well after the country had dipped into recession. Its unemployment rate and foreclosure rate are both well below the national average. It’s one of only six states that didn’t run budget deficits in 2009.

Meanwhile, California, long a paradise for regulators and public-sector unions, has become a fiscal disaster area. And it isn’t the only dark blue basket case. Eight states had unemployment over 11 percent in June; seven went for Barack Obama last November. Fourteen states are facing 2010 budget gaps that exceed 20 percent of their G.D.P.; only two went for John McCain. (Strikingly, they’re McCain’s own Arizona and Sarah Palin’s Alaska.) Of the nine states that have raised taxes this year, closing deficits at the expense of growth, almost all are liberal bastions.

Texas is a good example of an economy benefitting from business friendly measures. Of the fastest growing 30 cities in America in the last year, a full eleven of them were from Texas. And most of the others were either from red states like Idaho, Oklahoma and the Dakotas, or swing states like Colorado. Of traditional blue states, only Washington with two entries appears in the top 50. A damming indictment of the growth potential for the blue state liberal economy.

Texas’ relative success is quite startling. In 2008, 70% of all jobs created in the United States were created in Texas, Texas now has more fortune 500 companies than New York has. How has this been done?

Gov. Rick Perry says holding the line on taxes, having a reasonable regulatory structure and offering economic development incentives such as the Texas Enterprise Fund and Texas Emerging Technology Fund have attracted hundreds of employers to Texas. He notes that 7,300 new jobs were created in Texas in November 2008 alone.

It is all about making the economy business friendly. And nothing demonstrates this more than tort reform:

In fact, new businesses and doctors have flooded into the state in the wake of the lawsuit abuse reform legislation, which capped non-economic damages at $250,000. According to the Dallas Morning News, the average award prior to tort reform was $1.21 million; now it is $880,000.

Malpractice lawsuits have plummeted. In 2003, in a last-minute rush before lawsuit reform took effect, 1,108 medical liability suits were filed in Dallas County. Only 142 cases were filed the following year. In 2007, 184 cases were filed.

But tort reform does not necessarily mean throwing the people or the patient under the wheels of the business juggernaut:

To ensure protection for patients, the legislature beefed up the power of the Texas Medical Board and disciplinary actions against doctors have nearly tripled since 2001.

These differences in economic outcomes aren’t just restricted to Texas and California:

This assumption is borne out by an analysis of economic cycles by the website JobBait.com, which has found that since 1990 the states most vulnerable to economic downturns include the Great Lakes states of Michigan, Illinois, Ohio, and New York as well as Connecticut and California. Those most resistant have been generally red bastions such as the Dakotas, Nebraska, and Texas, and resource-rich states such as Alaska, Montana, New Mexico, and Wyoming.

The blue state mentality is to prop up a union based economy, a legacy that Obama is continuing. But whilst unions may be good for their employees, they hurt those outside the unions. Having gold plated health insurance, guaranteed jobs, and reduced working hours may be great for members of the UAW, but the federal propping up of these unions (for example, the Democrats are funnelling $10 billion of taxpayers money to the UAW as part of the Health Care bill) means that resources are being denied to non-union members. And whilst it may be coincidence that blue state economies are union based economies whilst red states are less likely to be, it’s also not difficult to see a high probability of causality there.

There is no guarantee that what works for Texas may not work for America, but isn’t it something that at least should be considered. But that would mean ignoring powerful Democratic supporters like trial lawyers and trade unions in favour of America at large. And the Democrats are never going to do that.