Tag Archives: red states

Policies Have Consequences

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On Monday, Issues & Insights posted an article about the opposing taxation trends between red states and blue states in America.

The article reports:

The Wall Street Journal recently reported on the growing divide between blue and red states when it comes to income taxes. What it failed to mention is that this shows the genius of the nation’s founders.

“Republican-led states are racing each other to flatten, cut, and eliminate individual income taxes, with 23 states lowering their top income-tax rates since 2021,” Richard Rubin and  Jeanne Whalen write.

And, indeed, this year, nine states – all Republican – either cut their top marginal tax rate or lowered their flat tax rate. Ohio became the 14th state to adopt a flat tax.

“Democratic-controlled states are moving the opposite way,” notes the Journal, “pushing to increase taxes on top earners to combat inequality and plug budget holes expected from Republicans’ cuts to federal health and nutrition assistance programs.”

The article includes two graphs that illustrate the result of each of these policies:

The article notes:

The Journal notes that the number of states with top rates below 5% and above 10% have both been increasing.

“The middle ground is quickly disappearing.”

So how is this a good thing? After all, we’ve written many times in this space about the folly of playing the “tax the rich” game.

It’s good news because this is exactly how our system of government is supposed to work. States are free to experiment with their taxing, spending, and regulating policies – and suffer the consequences.

And that’s just what we’ve been seeing. Millions of middle-class Americans are voting with their feet – leaving high-tax “progressive” states for those that keep their government spending in check, regulations to a minimum, and their taxes low.

I guess my husband and I were not the only people to get out of Massachusetts as soon as we could!

The Consequences Of Liberal State Government

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On Saturday, John Hinderaker at Power Line Blog posted an article about the movement of the American population from Blue States to Red States.

The article reports:

One of the most important phenomena in contemporary America is the Great Sort–we are increasingly dividing into red and blue states, in part because of domestic migration. But that migration is basically a one-way street: people are fleeing blue states and moving to red states. Many, but not all, of these migrants are conservatives seeking a more congenial home. And of course there are liberals living in red states, but very few of them are picking up stakes and volunteering for higher taxes and more sluggish economies.

This is not a new phenomenon. The billboard below is from 1971:

So what impact does this movement of people have on red and blue states? The article includes the following charts:

If the state governments are the laboratories of democracy, it is becoming very obvious which states are doing better economically and in other areas.

The article concludes:

Where does it all end? I don’t know, but one possibility is that the current balance in our national politics, where far-left and center-right forces are almost equal, may before long become obsolete. America may become definitively a center-right country, simply because that is where most people and most resources are located.

Moving illegal immigrants to red states might help restore the balance of power. Just sayin’.

 

Policies Have Consequences

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Recently, The Epoch Times posted an article about the village of Ilion, New York. For two centuries, Ilion has been the home of a Remington Arms Co. manufacturing plant.

The article reports:

In the village of Ilion, New York, 80 miles west of the state capital in Albany, residents are mourning the departure of gunmaker Remington Arms Co. after two centuries of continuous operation.

Without fanfare, the company announced last month that the manufacturing plant would be closing its doors on March 4, 2024.

“I feel like a family member has died,” Ilion Mayor John Stephens told The Epoch Times. “My dad raised four kids on a paycheck from there for 37 years. He walked to work and carried his lunch every day.”

Mr. Stephens said no one expected the announcement a week after Thanksgiving that the plant was set to close.

On Nov. 30, at 3:26 p.m., the company notified village officials of the decision by email. The message noted that “all separations” with the village would be completed by March 18, 2024.

Likewise, the company notified its 270 employees that they would soon be out of a job.

The article notes:

Publicly, the company attributed the plant closure in part to a hostile political climate in Albany regarding firearms production.

“I am writing to inform you that RemArms LLC has decided to close its entire operation at 14 Hoefler Avenue, NY 13357,” Remington Arms said in a letter to employees. “The company expects that operations at the Ilion facility will conclude on or about March 4, 2024.”

The Georgia-based company said it would continue to make firearms at its facility in Huntsville, Alabama, which opened in 2014, a year after New York’s passage of the Safe Act, which created stricter gun laws.

The anti-gun political climate in Democrat-controlled Massachusetts prompted competitor Smith & Wesson to move from its longtime base in Springfield to Maryville, Tennessee. The company announced the opening of its new headquarters there in October.

The article notes that the town has been losing population in recent years:

Until recently, Remington Arms employed about 1,500 workers, whose wages helped support the local retail economy, said village public historian Mike Disotelle.

“At noontime, when the employees would go to lunch, there would be a flood of factory employees going to local businesses,” he said.

Mr. Disotelle said Remington Arms was one of the village’s largest employers and a centerpiece of the downtown economy. This remained true even as the village continued to lose residents over the course of several decades, he said.

In 1960, the village had 10,000 residents. Today, that number is down to about 7,700 and could drop below 6,500 by 2030 due to the slow economy, high taxes, and limited housing availability, Mr. Disotelle said.

The northeast is losing its luster because of high taxes, limited housing, and the high cost of living. There is an exodus from blue states to red states. We just need to remind people not to bring their blue politics into red states.

The Individual States As Laboratories

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When our Founding Fathers put together the Constitution, they envisioned that the states would act as policy laboratories–that when one state enacted a policy that worked, the other states would copy that policy. That is a great idea, but unfortunately egos, lust for power, and other things interfere with that basic idea.

On Thursday, Issues & Insights posted an article illustrating the differences in the outcomes of some of the economic policies various states have chosen.

The article reports:

President Joe Biden last week bragged that his economic policies — straight from the Democrats blueprint that says “borrow, tax, spend, regulate, then do it all again” — are working. But as we’ve noted, Bidenomics has been a wreck, a flop that is taking us into a recession.

Not only did Biden openly boast as our sclerosis grows worse, he also, as Democrats always do, took a jab at “trickle-down economics,” claiming it has “failed the middle class … failed America … blew up the deficit” and “increased inequity.”

…We don’t see Biden or any other Democrat ever coming around to supply-side economic policies, the correct terminology for what they sneeringly call “trickle-down economics,” which asserts that lower taxes and less regulatory meddling fuel economic growth. Yet they are exactly what our economy — any economy – needs, now and forever.

In our post-lockdown world, the states that have the strongest economic recoveries are the red ones on the map. And what do they have in common? Low taxes and light regulation.

We can see this vividly in the rankings of states that have had the greatest increases in hiring over the last year. Of the top 10, only two are blue, or Democratic, states.

(The Washington Post marks Georgia, fourth on the list, as one of three blue states because Biden took its 16 electoral votes, but that is misleading [intentionally, we’re sure] because it is a red state with large Republican majorities in both chambers of the legislature and a popular [53% of the vote in 2022] GOP governor. Nevada, next at fifth, is also considered blue even though it too has a GOP governor.)

The next seven states, according to the Post, are also red or Trump states and they tend to “​​have unusually low tax rates and lean on extractive industries such as mining or petroleum. We’ve seen firsthand the economic boom that gas and pipelines can bring to struggling regions.”

The article also notes:

“Heavily taxed blue states such as New York and California,” the Free Beacon continues, “last year had some of the country’s most drastic drops in tax revenue. At the same time, Republican states are enjoying the highest revenue increases even as they keep income taxes low.”

All I ask is that when people who have the sense to get out of blue states and move to red states move is that they don’t bring their blue state policies with them!

The Rate Of Recovery

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On of the principles in the founding of America was that each state would be run individually and become a laboratory for new ideas. If a state had policies that were succeeding, other states would then be free to copy the ideas that worked. However, we are not necessarily seeing that concept currently put in practice. If it were, California would be copying the policies of Florida rather than trashing the Governor of Florida.

On July 5th, The Wall Street Journal posted an article illustrating the contrast in the economic conditions of blue and red states.

The article reports:

The pandemic has changed the geography of the American economy.

By many measures, red states—those that lean Republican—have recovered faster economically than Democratic-leaning blue ones, with workers and employers moving from the coasts to the middle of the country and Florida.

Since February 2020, the month before the pandemic began, the share of all U.S. jobs located in red states has grown by more than half a percentage point, according to an analysis of Labor Department data by the Brookings Institution think tank. Red states have added 341,000 jobs over that time, while blue states were still short 1.3 million jobs as of May.

Several major companies have recently announced moves of their headquarters from blue to red states. Hedge-fund company Citadel said recently it would move its headquarters from Chicago to Miami, and Caterpillar Inc. plans to move from Illinois to Texas.

The article includes the following:

Pandemic Recovery

The economic recovery of states since March 2020 has been uneven. Index of state progress, based on 13 metrics including economic output, employment, retail sales and new-home listings.

Please follow the link above to read the entire article. It is fascinating.

The article concludes:

California’s public-school enrollment has fallen 4.4% since the pandemic, according to American Enterprise Institute. In Oakland, the school board recently voted to close schools because of declining enrollment.

Florida saw a surge in new residents, many from the Northeast, where Covid-19 related restrictions such as school closures were stricter.

At the Ohana Institute, a private school in Florida’s Panhandle, for kindergarten through 12th grade, the waiting list for students grew from 95 just before the pandemic to 393 last fall, Executive Director Lettye Burgtorf said.

Mrs. Burgtorf said the school fielded requests from hundreds of parents around the U.S. who wanted to move to Florida to be closer to the beach. Many were also unhappy that their children’s schools in other states had moved to remote learning. The Ohana Institute went remote for several weeks, then reopened, with mask mandates. “The parents were really like, ‘We cannot educate our kids at home,’ ” Mrs. Burgtorf said.

For years, a real estate boom in coastal cities made many families wealthy because their homes appreciated. Now, that is happening in red states. Florida led all states with a 31% jump in the median home price in the 12 months through January, with prices soaring in the Panhandle.

Such price increases can narrow the cost-of-living differential with the blue states that the migrants are fleeing, and increase living costs for longtime residents who don’t own homes,

These days, Mr. DeSantis’s spokeswoman said, one of the top complaints the governor’s office receives is soaring rent.

The law of supply and demand is at work in the Florida housing market.

Analyzing The Data

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Issues & Insights recently posted an article comparing how the blue and red states and cities have handled the COVID pandemic. We need to learn from the mistakes made.

The article reports:

…Those that hewed to the Red State model of lower taxes, less regulation, and respect for the rule of law thrived – while those that followed the “woke” blue-state model, built on socialist top-down control, forced equality, and divisive racial identity politics, suffered.

One of the new studies, by Phil Kerpen of The Committee to Unleash Prosperity, Casey Mulligan of the University of Chicago, and Stephen Moore of the Heritage Foundation, and published as a working paper by the National Bureau of Economic Research, ranked states by how they performed in three major areas during the pandemic: economics, education, and mortality.

That study, for good reason, has garnered much attention. It shows that red states, in general, beat blue states hands down during the pandemic, largely due to the latter’s dedication to damaging COVID lockdowns.

“Shutting down their economies and schools was by far the biggest mistake governors and state officials made during COVID, particularly in blue states,” said Moore, a co-founder of the Committee To Unleash Prosperity.

New Jersey was the worst-performing state, while neighboring blue-state giant New York was next, ranked 49th. Also flunking out were California, Illinois, and Washington, D.C.

“They had high age-adjusted death rates, they had high unemployment and significant GDP losses, and they kept their schools shut down much longer than almost all other states,” according to the study.

So who did best? Utah, Nebraska, Vermont, Montana, South Dakota – and Florida.

Meanwhile, a second study from the U.S. Census Bureau showed that there has been massive population movement away from large blue-state cities toward red-state cities.

The article concludes:

As for New York, its leaders seem to think crime-ridden streets and more government spending will do the trick. Sorry, but New York’s losing its wealthiest citizens after years of misrule.

Far-left Democrats have an iron lock on government in Albany, so tax cuts and a crackdown on crime seems highly unlikely. In the meantime, one key group is leaving the state and city of New York in droves: Millionaires.

“New York’s share of the nation’s total millionaire earner population dropped to 9.9%, down from 12.7% as of 2010, the year after the state enacted a supposedly temporary and ultimately permanent higher rate on millionaire earners,” noted E.J. McMahon of the Empire Center for Public Policy think tank.

Good riddance you say? Millionaires pay 40% of taxes in New York. So losing so many to Florida, Texas and other red states is a disaster. All New York will suffer.

Truth is, America is being re-made, moving van by moving van, family by family, as the states’ demographic profiles and political leanings undergo dramatic shifts. It all points to a possible shift in political power toward conservative-leaning red states and away from once-dominant blue states. But how big that shift is remains to be seen.

As we’ve said before, the red-state model works. It has proved itself in good times and bad. Americans, you do have a choice: Red pill, or blue pill. Which is it going to be?

Our government was designed to give individual states the power to experiment with ideas to see what worked and what did not. The idea was that less successful states would copy what the successful states did. Unfortunately in our highly politically-charged atmosphere of today, blue states are not interested in learning from red states. Hopefully they will change their ways as their populations relocate.

What An Incredible Coincidence!

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Yesterday The Epoch Times reported that job searches in 22 Republican-led states jumped 5 percent on the day those states announced that they were ending the government’s supplemental unemployment benefits. What a coincidence!

The article reports:

Job searches jumped by 5 percent in 22 Republican-led states on the day each announced it was moving to end the Biden administration’s pandemic unemployment benefit boost, a Thursday analysis shows, suggesting a link between the jobless compensation top-up and peoples’ interest in looking for a job.

While the analysis, authored by Jed Kolko, Chief Economist at the Indeed Hiring Lab, notes that the increase in job searches was “temporary, vanishing by the eighth day after the announcement,” it may be viewed as an arrow in the quiver of those who contend that generous unemployment benefits are creating a disincentive for people to take up jobs.

“It is, of course, still unclear how this temporary boost in search activity will affect hiring or wages,” Kolko wrote in the analysis. “And the premature end of these benefits in June and July could well have a different effect on search activity, hiring, and wages than these announcements in May did,” he added.

A possible factor as to why the effect faded quickly is media buzz around the date of the announcement, as well as the opt-outs of the supplemental federal unemployment programs are not due to come into force until June or July. Kolko told the Washington Examiner that there could be a jump in job searches when the benefits actually expire.

I think it’s time some common sense wandered into this discussion. If I can make more money staying home than working, I am going to stay home. If I have to prove that I am looking for a job in order to collect increased benefits, I will probably look for a job. If I can simply sit home and watch television and collect increased benefits, I will do that. Human nature is pretty obvious here–would I rather stay home in my pj’s and get paid or would I rather get up, shower, and go to work only to be paid less? Seems pretty clear.

Why Are We Still Doing This And What Does It Accomplish?

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On October 7th, Newsweek reported the following:

More than 6,000 scientists have signed an anti-lockdown petition saying that coronavirus policies are causing “irreparable damage.”

The petition, which is named the Great Barrington Declaration after the town in Massachusetts it was signed in, was written on October 4 and has signatures from at least 2,826 medical and public health scientists, 3,794 medical practitioners and over 60,000 members of the general public.

It was co-authored by Dr. Martin Kulldorff, a professor of medicine at Harvard; Dr. Sunetra Gupta, a professor at Oxford University; and Dr. Jay Bhattacharya, a professor at Stanford University Medical School.

“As infectious disease epidemiologists and public health scientists we have grave concerns about the damaging physical and mental health impacts of the prevailing COVID-19 policies, and recommend an approach we call Focused Protection,” the petition says in its opening line. “Current lockdown policies are producing devastating effects on short and long-term public health.”

…The petition also discusses its approach for vulnerable people, noting that implementing measures to protect this group “should be the central aim of public health responses to COVID-19.”

The petition offers a number of examples of how to protect vulnerable people, such as recommending that nursing homes use staff with acquired immunity and delivering groceries and other essential goods to those who are retired.

“Those who are not vulnerable should immediately be allowed to resume life as normal,” the petition says.

It goes on to say that simple hygiene measures, such as handwashing and staying home when sick, can help achieve the goal of herd immunity, while also noting that young adults should work from home and advocating a full reopening of the economy.

Meanwhile, Just the News posted an article today contrasting the current economic conditions between red and blue states.

The article reports:

As Democratic candidates across the nation harp on the economic devastation they attribute to the Trump administration’s mishandled COVID response, a closer look at state by state unemployment data reveals something far different: a tale of two economies on starkly divergent paths out of crushing shutdown economics. In “red” states, economic recovery is in full roar. “Blue” states, meanwhile, lag far behind, still staggering under unemployment levels associated with the deepest recessions. Suspended somewhere between these two poles are politically mixed “purple” states muddling through with fittingly middling unemployment numbers.

Just the News reviewed  U.S. Bureau of Labor Statistics unemployment data by state for August (the latest data available).The national unemployment rate — which now stands at 7.9% — was 8.4% in August. However, the economic pain represented by that number was not spread evenly across red, blue and purple states — far from it. Fueled by broader, faster economic reopenings following the initial coronavirus crash, conservative-leaning red states are by and large far outpacing liberal-leaning blue states in terms of putting people back to work.

Just the News found that 9 of the 10 states with the lowest unemployment rates are are led by Republican governors (Montana, led by Democratic Gov. Steve Bullock is the lone exception). In startling contrast, 9 of the 10 states with the highest unemployment rates are led by Democrats (the exception being Massachusetts, led by Republican Gov. Charlie Baker, a critic of President Trump).

Please follow the link above to read the entire article. This article illustrates why local elections matter. The states whose voters put Republicans in their state government are doing much better than the states being run by Democrats.