The latest Fortune magazine features an interesting article on financial analyst Meredith Whitney’s new book, Fate of the States: The New Geography of American Prosperity.
[T]he U.S. economy is on the road to recovery. There’s just one big problem: The road is unevenly paved. Parts of the country are growing at rates on par with some of the world’s fastest-growing emerging markets, while others are being dragged down by high unemployment and mounting debt loads. The dichotomy is obscured by national economic data that show the overall U.S. economy growing at a sluggish 2% a year. The strong growth of the central corridor is being obscured by the weakness in debt-laden coastal states. From 2008 to 2011, Louisiana’s economy grew 16%, North Dakota’s by 27%, and Iowa’s and Nebraska’s by 11%. All in all, the 17 states that I call the central corridor collectively grew their economies by 8% from 2008 to 2011. The U.S. as a whole grew its economy by 6%. The coasts, which partied during the boom and got hit after the crash, grew theirs by 2%.
The reality is that the central-corridor states, largely skipped over in the boom years, now have more resources to attract new residents and businesses because they are not choking on debt and crazy pension obligations and forced into a dependency on higher and higher tax rates.
Of course, John Hood recently reminded us about the importance of carefully selecting good economic and public policy examples from other states and nations, not just ideas that sound good.
