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December 6, 2016

The Progressive-State Depression

The blue states of America are in a depression. I don’t mean the collective funk of liberal voters because they lost the election to Donald Trump.

The blue states of America are in a depression. I don’t mean the collective funk of liberal voters because they lost the election to Donald Trump.

I’m talking about an economic malaise in the blue states that went for Hillary Clinton. Here is an amazing statistic courtesy of the just-released 2016 edition of “Rich States, Poor States,” which I co-authored with Reagan economist Arthur Laffer and economist Jonathan Williams: Of the 10 blue states that Democrats won by the largest percentage margins — California, Massachusetts, Vermont, Hawaii, Maryland, New York, Illinois, Rhode Island, New Jersey and Connecticut — every single one of them lost domestic migration (excluding immigration) between 2004 and 2014. Nearly 2.75 million more Americans left California and New York than entered these states.

They are the loser states. They are all progressive: high taxes rates; high welfare benefits; heavy regulation; environmental extremism; high minimum wages. Most outlaw energy drilling. The whole left-wing playbook is on display in the Clinton states. And people are leaving in droves. Day after day, they are being bled to death. So much for liberalism creating a worker’s paradise.

Now let’s look at the 10 states that had the largest percentage vote for Trump. Every one of them — Wyoming, West Virginia, Oklahoma, North Dakota, Kentucky, Tennessee, South Dakota and Idaho — was a net population gainer.

This is part and parcel of one of the greatest internal migration waves in American history, as blue states, especially in the Northeast, are getting clobbered by their low-tax, smaller-government rivals in the South and the mountain regions.

By the way, pretty much the same pattern holds true for jobs. The job gains in the red states that Trump carried by the widest margins had about twice the job-creation rate as the bluest states carried by Clinton.

The latest “Rich States, Poor States” report, published by the American Legislative Exchange Council, shows a persistent trend of Americans moving from blue to red states. The best example is that from 2004-2014, the two most populous conservative states — Florida and Texas — gained almost 1 million new residents each. The two most populous liberal states — California and New York — saw an equal-sized exodus.

It’s easy to understand why people might want to leave gray and rusting New York. But California? California has, arguably, the most beautiful weather, mountains and beaches in the country, and yet people keep fleeing the state that is supposed to be a progressive utopia.

What doesn’t make California and New York paradise is the high cost of living — thanks to expensive environmental regulations, forced union policies and income tax rates that are the highest in the nation, at 13 percent or more. Florida and Texas are right-to-work states with no income tax. Is it really a shocker that people would choose zero income tax over 13 percent? New York politicians know that their record-high tax rates are killing growth, which is why the state is spending millions of dollars on TV ads across the country trying to convince people that New York has low taxes. Sure. And Chicago is crime-free.

Even when it comes to income inequality, blue states fare worse than red states. According to a 2016 report by the Economic Policy Institute, three of the states with the largest gaps between rich and poor are those progressive icons New York, Connecticut and Massachusetts. Sure, Boston, Manhattan and Silicon Valley are booming as the rich prosper. But outside these areas are deep pockets of poverty and wage stagnation.

The lesson to be learned from the experimentation of the states is that the “progressive” tax and spend agenda leads to much slower growth and benefits the rich and politically well-connected at the expense of everyone else.

Trump is now promising that on a national scale, he will cut taxes, deregulate and cut wasteful government spending. In the presidential debates, Clinton disparaged this agenda as “trumped up, trickle-down economics,” and she said it had never worked.

Yet prospering red states such as Florida, Tennessee, Texas and so many others keep stealing jobs and growth from blue-state America.

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