Alaska's University Cuts are Even More Short-Sighted Than You Think

Alaska Governor Mike Dunleavy shocked the state legislature last month when he vetoed over $400 million in state spending—a far steeper number than anticipated. Included in the veto was over $130 million in cuts to the University of Alaska. This comes as Alaska struggles to deal with a prolonged economic slump caused by low oil prices, forcing state lawmakers to make some tough decisions as tax revenue falls.

Lawmakers have since failed to override the governor’s veto. As a result, the university system may soon see an astonishing 41 percent cut to aid from the state, which will lead to layoffs and possibly outright closures of smaller campuses. The financial fallout from these cuts could be even larger as federal money and research grants fall through in response to staff and faculty cuts. The Anchorage campus, for example, could see 40 of its 105 degree programs eliminated. Moody’s dramatically downgraded the university system’s credit rating in response, which could further hamper the university’s finances down the road. 

Alaska’s case is extreme. Yet state universities nearly everywhere have seen substantial cuts to state aid in the aftermath of the Great Recession, putting further pressure on school budgets already strained by rising healthcare and pension costs. Some states have chosen to reduce their systems’ emphasis on research, and instead focus on teaching and career readiness, particularly at second and third-tier universities. 

As tempting as this may be, research-oriented universities produce long-run value for regional economic development. Research universities make regional economies more dynamic and resilient in the face of globalization, and create islands of economic activity in otherwise distressed parts of the country. For a struggling state like Alaska, this makes university cuts even more short-sighted than one might think.

Read the rest at the Niskanen Center.

Why is state of Texas helping bribers, polluters and pill-pushers?

Most businesses in Texas play by the rules, generate local jobs and are upstanding members of their communities. Unfortunately, our economic development policies are as likely to reward the bad guys as the good guys.

Texas offers some of the most generous economic development incentives in the nation. The Texas Enterprise Fund, the biggest “deal closer” for our state, provides cash grants to entice companies to come here. Even more generous is the Texas Chapter 313 incentive, a program mostly for energy companies that provides tax limitations worth tens of millions of dollars. Add to this local and county incentives, and Texas is notorious for picking a small set of companies for preferential tax treatment of cash payments — even bribers, polluters and pill-pushers.

Bribing government officials in the United States or abroad is illegal under the U.S. Foreign Corrupt Practices Act. Though rare, when companies are caught, it’s major news. Companies pay millions in fines and executives may even face jail time. In Texas and many other states, the few companies settling bribery claims are also companies that receive millions in taxpayer-funded subsidies.

Did state officials know that they were subsidizing bribers?

Read the rest at the Waco Tribune-Herald.

Notes on National Conservatism: A Rethink or Rehash?

Last week’s National Conservatism conference was billed by its organizer, Yoram Hazony, as a “big tent” event for conservatives to coalesce around a new vision of American nationalism. But after two days of vigorous discussion, the only thing that clearly united attendees was their general contempt for the left.

If anything, the conference underscored the irreconcilable divisions in the modern conservative movement. Depending on who was speaking, “national conservatism” entailed either transcending U.S. imperialism (Tucker Carlson) or reasserting our national interests abroad (John Bolton); rejecting libertarian economics (J.D. Vance) or embracing Calvin Coolidge-style laissez-faire (Amity Shlaes); pluralism with respect to traditionalist communities (Rusty Reno) or assimilation to the national culture (Amy Wax).

It’s said that the conservative coalition is a three-legged stool supported by war hawks, business elites, and the Christian right. If so, the National Conservatism conference represented each leg taking turns proclaiming itself the true spokesman of American nationalism while attempting to sweep a different leg away. Little was said about what would support the stool should any leg be removed. Entreaties to national solidarity hold no weight on their own.

Yet this may be a case where diversity is our strength. At the very least, the conference provided a useful venue for frank and open ideological reassessment of many conservative sacred cows. From my vantage point, a few patterns emerged that point to a viable vision of national conservatism in the areas of economics, federalism, and culture (and foreign policy, which is not my wheelhouse). The only question is whether it can gain traction.

Read the rest at the Niskanen Center.

Podcast: Explaining the Rural-Urban Political Divide

Our geographic divides are central to contemporary politics, including the election of Donald Trump. Election maps show dense liberal cities in a sea of sparsely-populated Red, advantaging Republicans in our geographic electoral system. Why are Democrats concentrating in cities?

Jonathan Rodden finds increasingly concentrated left parties around the world, disadvantaging liberal cities. It started with unionized industrial railroad hubs but accelerated with the changing cultural values of the party’s new coalitions. Will Wilkinson finds urban and rural areas are becoming economically and psychologically distinct, with cities concentrating those open to new experience and working in the technology-driven economy and rural areas retaining those averse to social and economic change.

Why states and cities should stop handing out billions in economic incentives to companies

U.S. states and cities hand out tens of billions in taxpayer dollars every year to companies as economic incentives.

These businesses are supposed to use the money, typically distributed through economic development programs, to open new facilities, create jobs and generate tax revenue.

But all too often that’s not what happens, as I’ve learned after doing research on the use of tax incentives to spur economic development in cities and states across the country, particularly in Texas.

Recent scandals involving economic development programs in New JerseyBaltimore and elsewhere illustrate just what’s wrong with these programs – and why I believe it’s time to end this waste of taxpayer dollars once and for all.

Economic development 101

Many states, counties and cities have economic development agencies tasked with facilitating investment in their communities.

These agencies undertake a variety of valuable activities, from gathering data to training small businesses owners. Yet one of their most high-profile activities is the use of tax and other incentives to entice companies to invest in their communities, generating local jobs and expanding the tax base.

Estimates of how much is spent on such incentives range from US$45 billion to $80 billion a year.

But what do taxpayers get for all this money? As it turns out, not much.

Read the rest at The Conversation.

Press Release: Bring the Small Business Administration into the Twenty-First Century

WASHINGTON, D.C., June 10, 2019 — As Congress considers the first reauthorization of the Small Business Act since 2000, the Niskanen Center and the Information Technology and Innovation Foundation (ITIF) have organized a coalition letter in support of reforms that will bring the Small Business Administration (SBA) into the twenty-first century.

“The last two decades have seen a disturbing decline in the formation of young, high-growth firms,” notes Samuel Hammond, Director of Poverty Welfare Policy for the Niskanen Center. “The disappearance of small businesses that scale quickly does not bode well for the health and dynamism of the American economy. Fortunately, the bipartisan reauthorization before the Senate Committee on Small Business & Entrepreneurship contains a number of important reforms designed to reverse this trend, in addition to a suite of long-over modernizations.”

Recent work from the Niskanen Center’s Struggling Regions Initiative, headed by Mr. Hammond, and by Dr. Robert Atkinson, President of ITIF, have both highlighted the need for SBA reform. They are joined on their letter by:

Dani Rodrik
Ford Foundation Professor of International Political Economy
John F. Kennedy School of Government 
Harvard University

John W. Lettieri
Co-founder and President
Economic Innovation Group

John Dearie
Founder and President 
Center for American Entrepreneurship

Carrie Hines
President & CEO
American Small Manufacturers Coalition

Sridhar Kota
Executive Director
MForesight: Alliance for Manufacturing Foresight

Oren Cass
Senior Fellow
Manhattan Institute

Mark Muro
Senior Fellow and Policy Director
Metropolitan Policy Program
Brookings Institution

Andrew Stettner
Senior Fellow
The Century Foundation

David Adler
Co-editor of “The Prosperity Puzzle: Restoring Economic Dynamism”
XA Investments

Originally posted at the Niskanen Center.

How Opportunity Zones Can Help the South Reach Its Full Potential

Economic divergence between urban and rural economies is as much a story about the South as the struggling Rust Belt. As the Wall Street Journal highlighted in a recent feature, the South’s decades-long convergence to the rest of the country has halted since the Great Recession:

In the 1940s, per capita income in the states historians and economists generally refer to as the South — Louisiana, Mississippi, Alabama, Georgia, the Carolinas, Virginia, West Virginia, Oklahoma, Arkansas, Tennessee and Kentucky — equaled 66.3% of the national average, according to historical data reconstructed by University of Kent economist Alex Klein and The Wall Street Journal. By 2009, that had climbed to 88.9%. That was the high-water mark. By 2017 it fell back to 85.9%.

It is true that incomes in the South have stopped gaining ground on the rest of the country, but the story is more complicated. The South is also home to some of the fastest-growing cities in the country, among them Atlanta, Charlotte, Raleigh, and Charleston. While their West Coast and Northeastern counterparts have enacted restrictive zoning laws that drive up the cost of living and deter in-migration, these fast-growing metros have so far avoided that temptation and remain magnets of economic opportunity. At the same time, places outside these cities have been struck by high poverty, job loss, and other forms of social hardship, driving overall regional economic outcomes away from the rest of the country.

The self-sorting of workers from struggling towns to places offering higher wages and living standards is an important driver of national growth. Policymakers in the South should continue to facilitate the migration of workers to the booming cities of the Sun Belt, but they must also pursue smart place-based policy to assist the communities that migrants leave behind. It is not a fact of life that vast swaths of the region are destined to succumb to stagnation and lag the rest of the country, and with a careful reconsideration of longstanding economic development practices, the South can reverse their divergence and spur more broad-based growth.

Read the rest at the Niskanen Center.

The Density Divide: Urbanization, Polarization, and Populist Backlash

In this new paper, I weave recent research in political science, economics, psychology and more into an account of political polarization and the rise of populist nationalism as a surprising and overlooked side-effect of urbanization.

I claim that we've failed to fully grasp that urbanization is a relentless, glacial social force that transforms entire societies and, in the process, generates cultural and political polarization by segregating populations along the lines of the traits that make individuals more or less responsive to the incentives that draw people to the city. I explore three such traits — ethnicity, ideology-correlated aspects of personality, and level of educational achievement — and their intricate web of relationships. The upshot is that, over the course of millions of moves over many decades, high density areas have become economically thriving multicultural havens while whiter, lower density places are facing stagnation and decline as their populations have become increasingly uniform in terms of socially conservative personality, aversion to diversity, and lower levels of education. This self-segregation of the population, I argue, created the polarized economic and cultural conditions that led to populist backlash.

Because the story of urbanization just is the story of a strengthening relationship between density, human capital and economic productivity, it's also the story of relative small town and rural decline. The same process that has filtered better-educated, more temperamentally liberal whites out of lower density places has left those places with less vibrant economies, but also with more place-bound, ethnocentric populations.

Read the paper at the Niskanen Center.

Elizabeth Warren wants an industrial policy. Here are the traps to avoid.

In a new campaign proposal for reviving American manufacturing, Sen. Elizabeth Warren (D-MA) argues that American companies have recklessly offshored industry, prioritizing shareholders at the expense of working- and middle-class jobs. To address this situation, she calls for aggressive interventions that include:

  • Weakening the U.S. dollar to spur export industries;

  • Expanding publicly funded R&D;

  • Requiring the government to purchase American-made products;

  • Investing in postsecondary apprenticeship programs;

  • and creating a “Department of Economic Development” to coordinate trade- and development-related agencies around a National Jobs Strategy.

Warren cites the experiences of Germany, Japan, and China as countries that have had success with industrial policies America is allegedly too timid and constrained to pursue. “If we want faster growth, stronger American industry, and more good American jobs,” she writes, “then our government should do what other leading nations do and act aggressively to achieve those goals instead of catering to the financial interests of companies with no particular allegiance to America.”

Sen. Warren’s proposal comes at a time when “industrial policy” — once a term of derision — is gaining plaudits among commentators and academics alike. But enthusiasm for what Warren calls “economic patriotism” must be tempered by careful analysis of the specific policies being proposed. In what follows, I take a closer look at the tools other rich countries have used to develop and sustain globally competitive manufacturing industries, and gauge their applicability in the U.S. context.

Read the rest at the Niskanen Center.

The Smart City: The Rise of Dockless E-Scooters

Much less than a “thing” or a “place,” a Smart City is the concept of integrating technology into the public realm and built environment. The deployment of sensors or other data-generating tools, and the collection, monitoring, processing of that data, will increasingly impact cities across multiple domains, from transportation, housing, and water to health and education. This blog series explores recent policy developments in the march towards smarter cities, with a special focus on transportation and information and communication technology (ICT).

The deployment of dockless transportation services across U.S. cities, from bikes to e-scooters, has elicited widespread excitement from early adopters, transportation wonks, and city governments alike. Each in their own way see dockless services as a promising solution to the nagging problems of congestion, vehicle emissions, and limited transportation options in low-income neighborhoods.

Yet dockless e-scooters, in particular, have also been met with considerable public and political opposition. E-scooters took advantage of a gap in the market, aided by the lack of regulatory barriers to dockless technologies. Cities, provider companies, and the public are now struggling to achieve an acceptable balance between an e-scooter Wild West and regulations that would threaten their very existence. The path forward lies in collaboration among all interested parties. As with any new technology being deployed in the public realm, robust public engagement and public-private cooperation is essential to address concerns and find an optimal solution. There is evidence that the policy process is moving in this direction, but not without growing pains.

Read the rest at the Niskanen Center.

Rethinking American Investment in an Intangible Age

At The Wall Street Journal’s 2017 CEO Council meeting, Gary Cohn—then the director of the White House National Economic Council—spoke to the Trump administration’s tax reform efforts. “We want companies to invest back in the economy,” he said, “not give money back, or sit on money because they don’t think there’s anything to do with it.”

Moments later, the Journal’s John Bussey turned to the audience and asked for a show of hands: “If the tax reform bill goes through, do you plan to increase investment, your companies’ investment, capital investment?” In the crowd of over 100 top corporate executives, only two or three hands could be seen rising on the C-Span recording.

“Why aren’t the other hands up?” Cohn asked through nervous laughter, before the moderator deftly changed the topic.

Opening with the transcript of this exchange, a new report from Senator Marco Rubio, “American Investment in the 21st Century,” suggests it knows the answer to that question. But in a compelling shift from the usual Republican focus on taxes and regulation, it points the finger squarely at over-financialization and the notion that corporations exist to maximize returns to their shareholders.

Shareholder primacy, the report argues, “tilts business decision-making towards returning money quickly and predictably to investors rather than building long-term corporate capabilities, reduces investment in research and innovation, and undervalues American workers’ contribution to production.”

Read the rest at the American Conservative.

Has Trump Handed Democrats an Opening in Red America?

President Trump’s feckless trade war is bludgeoning the bottom line of the Republican Party’s reliable rural base. But the party’s disregard for the economic interests of its own constituents goes well beyond barriers to Chinese markets.

Small towns and rural areas, along with some Rust Belt metros, are falling ever further behind booming urban dynamos — leaving many heavily Republican regions in a deepening morass of economic deterioration, joblessness, substance abuse and declining life expectancy. The lower-density places most Republicans call home produce barely half as much wealth as our biggest cities — and it’s showing.

Yet the travails of America’s struggling red regions, and practical ideas about might be done to alleviate them, are barely mentioned in right-leaning policy circles. For example, “The Once and Future Worker,” a widely discussed book by Oren Cass, a former economic policy adviser to Mitt Romney now at the Manhattan Institute, focuses on initiatives to expand employment and wages for American workers but largely neglects the changing geography of economic output and opportunity behind the woes of heartland workers.

Worse, the Republican Party under Mr. Trump has blundered into a positively anti-rural economic agenda, leaving the soybean fields littered with $20 bills for enterprising Democratic presidential hopefuls to pick up. The president’s nativist immigration agenda deprives farms and small factories of workers local economies can’t otherwise supply, while the administration’s latest budget proposalcontinues the Republican assault on the health care and social insurance programs rural populations increasingly rely on to survive.

To address the problem, we need to understand it. For decades, poorer areas had been converging economically with wealthier ones, but that stalled in the early 1980s as employment began to shift away from widely distributed agriculture and manufacturing jobs toward the service sector and high-skill “knowledge work” in the city-centered information economy.

Read the rest at NYTimes.com

How to Escape the Two-Income Trap

The reprisal of Elizabeth Warren’s 2004 book The Two-Income Trap has sparked a valuable debate within the conservative policy community. Co-authored with her daughter Amelia Warren Tyagi, the book argues that the rise of two-income households has created a bidding war over goods like housing and child care, offsetting apparent household income gains and leaving families in a more precarious financial state.

Tucker Carlson thinks the book is onto something and that the GOP should become the party of traditional families. Helen Andrews thinks so too, but laments the contemporary dearth of female voices leading the charge. Other conservative thinkers aren’t so sure, particularly those like Scott Winship who have long defended the encouragement of maternal work as a pillar of conservative anti-poverty policy.

Warren’s original argument consists of many moving pieces, including tie-ins with her somewhat dubious academic work on household bankruptcy. Nonetheless, The Two-Income Trap’s appeal to a certain type of traditionalist should be obvious enough.

Yet accepting Warren’s version of the story at face value falls into a trap of its own, derailing the normative debate traditionalists would like to have into an empirical debate about Warren’s specific claims. Matt Bruenig’s critique, which showed how the data in The Two-Income Trap was improperly adjusted for inflation, was particularly devastating. Michael Strain of the American Enterprise Institute picked apart Warren’s “bidding war” theory in a recent column, writing: “If you’re looking for a reason why their costs have risen so much, start with policies that subsidize their demand and restrict their supply, not with women working.”

Read the rest at the American Conservative.

A National Scholars Program for Struggling Regions?

In the wake of the college admissions scandal, the meritocratic nature of elite universities is under new scrutiny. The revelation that the ultra-wealthy and connected were bribing officers and fabricating application information struck a chord at a time when inequality is at the forefront of the national conversation. Even more dismaying is that these bribes likely weren’t necessary to begin with. Perfectly legal donations and alumni connections routinely land the unexceptional children of the rich and powerful into prestigious institutions.

Regression to the mean is one of the many anxieties of affluence. Yet entry into exclusive collegiate social networks can help to ensure class and status are reproduced across generations. If the black market for elite college admissions feels worse than the usual influence peddling, it’s only because this ulterior motivation is rarely expressed so explicitly.

Fortunately, there’s a simple way elite universities can atone for their role in perpetuating inequality by helping talented students from struggling communities and school districts move up in the world.

One model comes from Johns Hopkins University. It’s called the Baltimore Scholars Program (BSP) and it works like this: Students who attended either a Baltimore City public school or applicable charter school from at least the 10th grade are eligible for a means-tested scholarship. For those coming from families making less than $80,000 per year, tuition, room, and board are completely covered. For those making between $80,000 and $150,000 per year, the family’s contribution is capped at 10% of total family income.

This isn’t affirmative action for Baltimoreans. They still need to get into Hopkins, but once they clear that hurdle, all or most of the costs associated with going to school are taken care of.

The same model could easily be applied to other communities. For example, Stanford could have an Oakland Scholars Program; Harvard and MIT could have a Southie Scholarship; Princeton could have one for students from the Trenton and Newark public schools system, and so on.

On top of scholarships for needy students in their own communities, elite universities could adopt a nationwide focus, offering needs-based scholarships to talented high school graduates from struggling public school districts across the country.

Even if admissions skullduggery were done away with completely, children in low-income households and of limited social capital would still face substantial barriers to getting into top colleges. While these barriers are varied and require many different solutions, the inability to pay for tuition continues to discourages otherwise-talented students from applying at all.

While legislation and other bureaucratic hurdles may need to be cleared before a “Struggling Regions Scholars” program could be implemented in public universities, private universities could create such a program unilaterally. The quality of public education in struggling areas will naturally limit the supply of qualified applicants. Nonetheless, expanding something like the Baltimore Scholars Program to elite universities across the country would go a long way to making the college admissions process more equitable and accessible. Perhaps the best way for top universities to reclaim the mantle of meritocracy is to start practicing it.

OSRDaniel Takashblogs
The Hamiltonian Approach To Reparations

Reparations are now a consensus position within the 2020 Democratic primary.

Let that sink in. From the central plank of Rev. Jesse Jackson’s presidential platform in 1984 and 1988, to Ta-Nehisi Coates’s blockbuster Atlantic essay in 2014 — reparations for the descendants of slavery have gone from fringe to mainstream in roughly a generation. What Bernie Sanders called “divisive” only a few short years ago now even finds support among thoughtful conservatives like David Brooks and Michael Brendan Dougherty.
Yet behind the moral clarity of reparations is immense disagreement about what form it ought to take. Should reparations be direct cash payments or land grants? Does a race-neutral “Baby Bond” or refundable tax credit count if white families also benefit? Most Democratic primary candidates have kicked the can to an independent commission. “I support that we should study it,” in the words of Kamala Harris. While that may be smart politics, a backlash is already brewing among activists who insist reparations should be, by definition, directed to American descendants of slavery only.

Before going down that path, we should think carefully about what a program of direct cash payments to the descendants of slavery would signify. After all, an act of reparation is distinct from an act of restitutionor compensation. Reparations fall into the category of transitional justice — one part economic, one part symbolic redress for human rights violations that kicks-off a “reparative” process of truth and reconciliation. They are therefore as much about publicly confronting an injustice as repairing some discrete, calculable harm. A direct payment, in contrast, risks trivializing slavery as merely an issue of “unjust transfer and acquisition,” as if the stolen fruits of African American labor neatly correspond to an accounts payable hidden deep within the U.S. Treasury. 

Slavery was an act of theft, to be sure. But even moreso, it was an act of colonization — one that retarded the development of a population and entire region for generations after emancipation. To truly address that intergenerational legacy, struggling African American communities need investments in infrastructure and a strategy for developing a high-wage workforce. In other words, they need industrial policy.

Read the rest at NiskanenCenter.org.

How Can Policy Help Left-Behind Americans?

By Charles Fain Lehman

A new project, announced Wednesday by the libertarian-leaning Niskanen Center, aims to define a comprehensive program to help put regions struggling despite the roaring economy back on their feet.

The Struggling Regions Initiative (SRI), a project of the Center's Poverty and Welfare Policy program, is intended "to push the frontier of research into the issues facing struggling regions with the goal of developing new ideas for broadly shared economic growth," according to its website. Funded by the Rockefeller Foundation, the SRI will focus on finding ways to overhaul federal policy in order to better support those regions that are increasingly left behind.

Samuel Hammond, who runs the Poverty and Welfare Policy Program, framed it as being about designing "the right framework," so that "ordinary workers can benefit from change rather than suffer from it."

"It's not Washington's responsibility to micromanage local economies or to pick winners and losers. Yet no one can deny that national policymaking has ripple effects throughout the country," Hammond wrote in an article introducing the project. "The Struggling Regions Initiative is premised on identifying realistic ways — from trade agreements to the structure of the tax code — to strengthen and diversify America's industrial economy, and in a way that promotes economic growth and dynamism."

Support for ailing regions is likely to feature heavily in electoral pitches from the left and right come 2020. What makes Niskanen's plan different is sort of sub-textual: In order to fix what's hurting these regions, it suggests, the American federal government needs to, for the first time in decades, articulate a comprehensive, coherent industrial policy. …

Read the rest at FreeBeacon.com


Here’s an issue Democrats should jump on

By Jennifer Rubin

We have written about the serious and widening gap between rural and urban America. The red/blue divide is largely a rural/urban divide — even within states. As urban areas prosper, rural areas are depopulating, coping with an aging population and suffering from more health problems (including opioid addiction). If rural America was as rich, healthy and vital as the urban centers and their thriving suburbs, President Trump might not have been able to exploit this population with fear-mongering, racism and xenophobia.

If rural America recovers, could we get sustained growth above 3 percent? Increase the average lifespan? Diminish the audience for right-wing populism? Possibly, but in any event, fellow Americans are suffering and neither party is coming up with constructive solutions.

Fortunately, the indispensable Niskanen Center wants to look at this problem. “According to data from the Bureau of Economic Analysis, over half of total U.S. [gross domestic product] is produced by only 20 metropolitan areas,” Niskanen reports. “The New York metropolitan area alone accounts for over 10 percent of the nation’s output in any given year, and with only 6 percent of its population. America may remain the land of opportunity, but in way that has become increasingly concentrated in fewer and fewer locations.” There are few winning zip codes and many losing ones. “Once-vibrant regions across the United States are struggling with population decline, the collapse of industries, and shrinking tax bases.” …

Read the rest at WashingtonPost.com

It's time to get serious about helping America's struggling regions

By Samuel Hammond and Michael Myers

Despite our internet age, where a person lives and works matters more than ever before in the modern American economy. Between 2007 and 2017, 80 percent of U.S. counties experienced declines in their working-age demographic. The New York metropolitan area now accounts for over 10 percent of the nation's output, yet only 6 percent of its population. America is still the land of opportunity, but in a way that has become increasingly concentrated in a shrinking number of locations.

The contemporary success of cities has an ominous flip side. Once-thriving regions across the United States are struggling with the collapse of industries and shrinking tax bases. Cities, on the other hand, have failed to properly absorb newcomers in search of opportunity, driving up rents and exacerbating local inequality. Policymakers often treat these two kinds of inequality — inter-regional and intra-regional — as separate. But what if they are two sides of the same coin?

It’s time to get serious about the regional nature of inequality, and push the frontier of research into the issues facing struggling communities, both rural and urban. 

There’s clearly an appetite for fresh thinking in economic development policy. Consider the battle over Amazon’s HQ2, which pitted more than 230 cities and development authorities against one another, each offering more outlandish inducements than the last. In the end, Amazon settled on an affluent part of Northern Virginia, bringing the promise of major investments to one of the richest zip codes in the country. …

Read the rest at TheHill.

How to Prevent the Next Lordstown

General Motors first broke ground in Lordstown, Ohio, 55 years ago and was once considered the most modern GM plant in the country. Thanks to a combination of business decisions by the company, tariffs implemented by the Trump administration, and a general dearth of innovative thinking the Lordstown Assembly is now set to close for good in January 2020.

From its first car, the Chevy Impala, to what now appears will be its last, the Chevy Cruze, the plant was known for its adaptability to ever-changing consumer demand. But with the announcement that GM is cutting 14,000 jobs across North America, including shuttering its Lordstown operations, adaptation has given way to extinction.

The ecological analogy is useful in more ways than one. The Trump administration’s tariffs on steel and aluminum have cost Ford and GM about $1 billion each. In any commercial ecosystem, when you raise the cost of inputs—a factory’s food source—the population declines.

Automakers, meanwhile, are looking ahead to trends in self-driving and electric vehicles. Yet rather than fostering that next stage in evolution, blunt trade restrictions and threats to revoke subsidies are the economic equivalent of wildlife conservation, treating the U.S. automotive sector as if it were an endangered species.

Public policy isn’t the only source of blame for the Lordstown closure, but it clearly hasn’t helped. Simply put, Washington, D.C., needs creative  policies to encourage genuine economic development. …

Read the rest at TheBulwark.com