Conservatives: Winning the State-by-State War, Losing the Federal Battle
Arthur Laffer and Stephen Moore have an interesting article at the Wall Street Journal that argues conservative economic policies are winning big on the state-by-state level, as witness the pronounced tendency of individuals and business entities to "vote with their feet" by moving to low-tax, business-friendly areas. Meanwhile, "blue-state areas such as Cleveland, Detroit, Buffalo, Providence, and Rochester were among the biggest population losers."
Looking ahead, the authors predict a "region stretching from Florida through Texas could become a vast state income-tax free zone." Florida, Texas, and Tennessee already have no income tax, while Louisiana, North Carolina, Kansas, and Oklahoma are heading that way. Meanwhile, the basket-case blue states are just getting worse and worse, doubling down on the failed policies that sent waves of citizens and capital to redder climates. The authors speculate that regions where geography sandwiches less business-friendly states between low-tax right-to-work powerhouses will create a "domino effect" of cascading reform.
It's an intriguing analysis, and very much in line with what Louisiana governor Bobby Jindal has been advising conservatives to do: win at the state level, building popularity and political capital for national elections. But I'd raise two notes of caution:
1. Population shifts from blue to red states can have a nasty way of bringing blue-state political contagion along with them. Anyone who lives in one of those fast-growing areas has heard their new neighbors immediately set about complaining that "you don't do things the way we do it up North," oblivious to the relationship between those policies and the economic quagmire they fled. The new arrivals get to vote in their new home states, and their growing numbers can exert real political pressure. I happen to live in one of those fast-growing areas, and it is not uncommon to hear longtime residents refer to blue-state refugees as "locusts."
2. Liberal dominance at the federal level can make all those state-by-state triumphs obsolete. Look at all those Republican governors bending the knee to ObamaCare, sometimes after campaigning on the explicit promise to resist it without quarter. Laffer and Moore celebrate red-state energy sector triumphs, but the Obama Administration has already interfered in that sector, and it would like to interfere more. Federal policies such as the minimum wage and ObamaCare raise the cost of labor everywhere; red states might do better, but they may not do well enough to create the tsunami of Republican popularity that Governor Jindal hopes for.
And not to put too fine a point on it, but the way things are going, the end result of conservative pro-growth triumph at the state level is likely to involve red states bailing out those moribund blue states, at the stern direction of Washington, D.C. When places like Illinois and California slide into full-on fiscal collapse, their electoral strength will allow them to make demands that red states will not be allowed to refuse.