Places that still produce tangible things need energy, and at prices like those we have today.
If next year’s election is a referendum on Donald Trump, you can hand power to the Democrats now. But fortunately for the president, and the Republican Party, politics remains more about interests than personalities.
More than by cultural memes touching on race, gender, and even taste, the United States are divided by where we live and how we make our living. America, after all, is a vast country and its remarkable economic diversity is what makes it so dynamic and capable against all competitors.
In much of the country, the economy still relies on tangible things—agricultural production, energy, manufacturing and logistics. But in the Northeast and on the West Coast, the economic drivers are intangible—technology, business services, tourism, financial services and real estate.
This has come at a steep cost to the remaining working- and middle-class people of those regions, even as it has inflated the self-esteem of those who are making it in super-star cities. The New York Times’ Farhad Manjoo claims that dense urban centers are “the real America.”That’s not so. In reality, most of our economic activity takes place in smaller and mid-sized metropolitan areas, and most of the recent growth, notes demographer Wendell Cox, has not been in places like Manhattan but sprawling, low-density cities of the sunbelt, as well as some in the Heartland. All together, 90 percent of our GDP generated in metropolitan areas is generated outside the densest regions.
The once celebrated American heartland, as Jon K. Lauck notes in his book From Warm Center to Ragged Edge: The Erosion of Midwestern Literary and Historical Regionalism, is now viewed by the great cities as a bastion of narrow-mindedness, religiosity, sexism and racism. To curb the rubes’ political influence entirely, progressives now seek to undermine the electoral college, which would guarantee, among other things, that no presidential candidate need visit the Great Plains.
Generally, the urban upper class see the hinterland as deficient, with no place in the modern world economy. As economies built around traditional industries like manufacturing, energy, agricultural, home construction and basic business services struggled during the first decade of this millennium, the progressive clerisy at places like Slatecrowed that these often higher-paying blue collar jobs were never coming back. Generally obsessed with issues of gender or race, many progressive whites—an increasingly radical group— have little more than contempt for the working-class whites who inhabit our smaller towns and cities.
Unlike the tech oligarchs and the financial giants, people working in the tangible economy had little influence under President Obama and, in the case of energy, seemed slotted for a radical downsizing. In contrast, since Donald Trump’s election, growth in the Heartland and southern region has outstripped that of the Democratic base of big cities and fancy suburbs.
Similarly, Trump’s emphasis on restraining China’s industrial juggernaut may be unpopular with gentry politicians in both parties, including Joe Biden, but it’s resonated in the Heartland, which suffered the bulk of the estimated 3.4 million jobs lost since 2001 from China trade. Perhaps if China took the jobs of media personalities, academics and tech oligarchs, we might expect similar concerns in Manhattan, Boston, LA or the Bay Area.
New York City had one million industrial jobs in 1950. Despite its stunning resurgence in the last decade, it now has less than 100,000. The picture is much the same in California.
Yet in other places the industrial economy has surged, adding nearly 500,000 jobs over the past two years. This growth may now be slowing, in part due to trade tensions, but the geography of industrial growth continues to tilt towards less regulated states such as Nevada, Arizona, Indiana and Texas. If Trump’s bumptious tariff policy brings back American jobs—for example with the return of Black & Decker from China announced recently or the possible shift of iPhone production—the beneficiaries likely will not be in Manhattan, Los Angeles or San Francisco, but in Texas, Indiana, Wisconsin or Michigan.
The remarkable resurgence of American energy has tilted the economic momentum further, to the point where barbers in places like Midland, Texas can earn close to $200,000 annually. In the last years of the Obama administration, California, Washington, Massachusetts and New York all experienced rapid GDP growth. But now the most recent Bureau of Economic Advisors report shows that at the end of 2018 income growth is now strongest in the pro-Trump states, with Texas registering six percent GDP growth while states like North Dakota, Oklahoma and Pennsylvania outpace—often by a wide margin—California, Massachusetts and New York.
If you read the established media, or listen to the current gaggle of Democratic wannabe presidents, there’s a giddiness about the party’s leftward lurch, most evident in plans relating to climate change policy. Yet to broad swaths of the country—including in more peripheral parts of blue states—demand to rapidly eliminate all fossil fuel poses something close to its own existential challenge.
Alexandria Ocasio-Cortez can speak about going on a war footing to “fight” global warming in part because there’s not much industry, or for that matter energy generation, in her district spanning parts of Queens and the Bronx. It’s a different matter if you work in the fossil fuel business or at a nuclear power plant. This is already stirring concern among private sector unions who predominate in these sectors, as exemplified by the labor protest at the Democratic Convention in San Francisco in 2016. (Public unions, on the other hand, tend to favor GND since it would expand government employment and power).
In California, 400,000 people worked in the conventional energy industry as recently as 2012, but many of those jobs now seem slated for elimination. Nationally, a fossil fuel wipeout could eliminate roughly 10 million jobs with the impact strongest in Texas, North Dakota, Oklahoma, Alaska and Louisiana, and increasingly Ohio and Pennsylvania.
Even broader would be the impact of high energy prices on manufacturing-based economies. Every place in the world—Germany, Australia and California—that has embraced GND-style policies endures sky-high energy prices. Ever higher electricity rates in California are now roughly twice those of neighboring states (despite the Golden State’s huge energy reserves) and one reason why factory jobs are headed elsewhere and “energy poverty” is on the rise.