Yet more fuel: Blue v Red financial status.

Manic Moran

Forbes has a look at the general trend on how bad a fiscal situation the various states are compared to their political demographics.

http://www.forbes.com/2010/02/25/democratic-states-bad-financial-shape-personal-finance-blue.html

Of the 10 states in the worst financial condition, eight are among a total of 23 defined by Gallup as "solidly Democratic," meaning the Democrats enjoy an advantage of 10 percentage points or greater in party affiliation. Of the three other basement-dwellers, Kentucky is defined as "leaning Democratic" (a five- to 10-percentage-point Democratic advantage) and the remaining two--Louisiana and Mississippi--are termed politically "Competitive"

Utah, the fiscally fittest state, has debt [per capita] of just $442 and unfunded pension obligations of $7,272 per resident. It is also America's second reddest state with a 21-percentage-point Republican advantage in party affiliation

Why? Hardly a surprise.

Why do Democratic states appear to be struggling more than Republican ones? It comes down to stronger unions and a larger appetite for public programs, according to Kent Redfield, professor emeritus of political studies and public affairs at the University of Illinois' Center for State Policy and Leadership

Surprisingly, to me at least, California isn't the most screwed State. It's not even second worst, it's fourth-worst. After Connecticut, New York, and worst of the bunch, Illinois ($4,490 debt per capita, $17,600 unfunded penion obligation per resident).

The real problem is that the people want to eat their cake and have it too. Every time the legislature in California proposes a cut to something, there's an uproar. Any time there's a proposal to increase a tax, there's an uproar. (And CA's taxes are already stupid-high by American standards).

Go figure.

NTM

rightwingdub

Well California looks like it will elect a democrat mayor in November which will worsen further California's financial position, how's Arnie getting on with trying to correct California's dire financial position? Those left wing dogooder Crats in the state legislature are doubtless opposing even the most modest spending cuts. Newm York is a disaster and I heard Paterson isn't even standing this year, New York is a very left wing state, if only Giuliani would stand this year for Governor.

Manic Moran

Not surprised that the Democrats will win California's governor's seat. Have you seen the candidates that the Republicans are putting forward? Unless something dramatic changes, I'm voting for Moonbeam. He's fairly moderate, and has been around long enough to know what actually works.

NTM

jank

Are they taking into account that these states are generally much more urbanised than the red states. Like Utah and California is like comparing Blarney and Brimingham

Manic Moran

Arguably, urban areas are going to be more efficient due to economies of scale. For example, for one policeman to cover 10,000 people, he just needs to be on foot in New York, and he needs a car with a lot of gas to cover Wyoming. The amount of miles of road to be maintained per capita is going to be much higher. And so on.

You also have the self-fulfilling problem that urban areas do tend to be Democratic anyway, so are they failing because they're urban, or are they failing due to Democratic policies?

NTM.

jank

Not really. The more urban an area the more services one has to provide. There is a reason that germany has lots of small cities but non that are really big. The larger the city the harder and more expensive it is to manage.
Also workers in urban areas are generally paid more as things are more expensive.
It is not like for like and am surprised that this isnt accounted for.

Manic Moran

jank wrote: »

Not really. The more urban an area the more services one has to provide. There is a reason that germany has lots of small cities but non that are really big. The larger the city the harder and more expensive it is to manage.
Also workers in urban areas are generally paid more as things are more expensive.
It is not like for like and am surprised that this isnt accounted for.

Not sure I follow. Sure, on a square-mile basis there are going to be more families who need social services, more bins that need collecting, and so on, but on the other hand, there are similarly on a square mile basis more taxpayers to pay for it all.

And to go from one bin to the next in New York requires all of about 30 steps, to do the same thing in Nebraska would require three minutes of driving.

It's also to be pointed out that just because there are large urban areas doesn't mean that the State is urban. Look at California. Sure, it has Los Angeles and San Francisco. But look at the sheer size of the State, varying from the deserts of Mojave to the mountains of Shasta. California is predominantly rural. You can make the same argument for New York. Outside of NYC, how much of the State is urban? Albany? Buffalo? Hardly huge metropoli.

NTM

Moriarty

I'd have thought that urbanised areas would be harder hit by the economic problems due to the industries that urban areas attract (and specifically, the exposure/reliance of the state to the loss of high-value, high-risk tax dollars from these industries) - financial services, manufacturing, generic service sectors, all of which appear to be amongst the hardest hit in the economic problems.

If you had a long-term low tax base to work from, you have less of a height to fall from when the tax carpet is pulled from under you, non?

Amerika

One might also argue there exists a correlation between the size of unions within a state, and the economic condition of the state. Interesting to note that page 3 shows the size of each states union workforce. Most of the top five listed in the Forbes article are also the highest unionized states.
http://www.scribd.com/doc/26280402/The-Unions-of-the-States

southsiderosie

Interesting article - thanks for posting.

There are a few things that the article doesn't discuss. The first is political culture: New York, New Jersey, Illinois and Louisiana are arguable the four most politically corrupt states in the country. Gail Collins actually wrote a funny/sad column about this for the NY Times a few weeks ago.

Also, I'm not so sure about the red/blue labels. For example, Louisiana and Illinois are similar in that the politics are a balancing act between a large corrupt city and a patchwork of corrupt rural areas. In both states political labels don't quite have the same meaning as elsewhere; rather whose patronage machine you belong to (under the banner of a given label) is more important...which brings us back to the first point about corruption.

The other problem that I see a lot of the "bad" states having is that they are saddled with really old infrastructure. New York, Boston and Chicago in particular have creaky, expensive public transportation systems that are critical to the logistics of the metro area, but are extremely expensive to maintain. Sun Belt cities don't have to deal with this. Arguably unions are an issue here as well, but it is going to cost Chicago 4-6 billion over the next to make the "L" usable - not "modern", but usable. Phoenix doesn't have this problem.

That said, I wholeheartedly agree with the "cake and eat it too" sentiment.

Stella777

southsiderosie wrote: »

That said, I wholeheartedly agree with the "cake and eat it too" sentiment.

Me three! That mentality drives me bonkers.

Remember back in when they were having the Town Halls on the health care issue? One attendee screamed: "Get your God damned Government hands off my Medicare!"

She was completely oblivious to how ridiculous that statement really was.

If Medicare isn't a government entitlement program, then I don't know what is!

Black Swan

To claim that one colour is better governed than another completely ignores the fundamental and complex differences between the 50 states.

We can talk blue and red states all day at the state level, completely ignoring the fact that during the last term of Clinton up until the mid-term elections in 2006, the 50 states sent more Republicans overall to the US House and US Senate than Democrats, while at the same time controlling the executive from January 2001 to January 2009 with Bush-Cheney. With such excellent Republican majorities in both the House and Senate sent to Washington DC, by those states, what condition was the US economy when it was handed over to Obama in January 2009?

I can ask a similar over-simplistic question: During the time when the Republicans were the Congressional majority, were the Republicans sent to Washington DC from their states less competent at governing than those Republican politicians left behind in those states they came from?

Further, comparing Utah with California is truly problematic, and a gross over simplification of the cultural, social, religious, historical, governmental, and economic differences, besides demographically significant differences in population size (CA 36.8 million and UT 2.7 million), density (CA 217.2 and UT 27.2), diversity (e.g., CA 44% White and UT 84% White).

Did Forbes compare GDP per capita for California and Utah, or conveniently ignore that vast difference? California ranks #11 with $42,696, while Utah is ranked #49 of the 50 states at $30,291, only beating #50 Mississippi ($29,569).
Link: http://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP_per_capita_(nominal)

Also, it seems that California has undergone substantially larger natural disasters than Utah recently? I can remember being warned to vacate our residence during fires that raged all over southern California a couple years ago, while we choked from the fire smoke filled air? Comparing California with Utah is not metaphorically similar to apples and oranges, but rather comparing Earth with Pluto (which isn't even a planet).

I can offer yet another over-simplistic and silly argument: You would think that the Republican party would nominate from their colour states the best-of-the-best Republican candidates for president and vice president? But when you look at the 2008 Real GDP for "Red" Arizona (McCain) and "Red" Alaska (Palin), you see only negative growth, with Alaska leading all 50 states with the greatest negative at -2.0?

Link: http://www.bea.gov/newsreleases/regional/gdp_state/gsp_newsrelease.htm

Forbes magazine was the source of the OP article? No selective spin? Is Steve Forbes the current editor-in-chief, once a Republican candidate for president in both 1996 and 2000 (and with rumours spreading about 2012)? Geeeee, I bet I can spin as good as Steve Forbes (Blue goes up on one toe and does a 360).

Permabear

This post has been deleted.

Valmont

It's interesting to note that The Economist also wrote an article on the possible transformation of Texas into a blue state sometime in the near future. I find this strange considering the 'red' economic model has worked very well for them, as DF has explained above.

Manic Moran

With such excellent Republican majorities in both the House and Senate sent to Washington DC, by those states, what condition was the US economy when it was handed over to Obama in January 2009?

Seems pretty irrelevant when speaking of the issues of the States which tend to be relatively unaffected by external affairs. The States do not, for example, have to fund a war, which is one of the larger Federal outlays.

California ranks #11 with $42,696, while Utah is ranked #49 of the 50 states at $30,291, only beating #50 Mississippi ($29,569).

Which strikes me as being even greater mis-management by California then, if they have more income coming in per capita, yet still manage to have higher debts.

Also, it seems that California has undergone substantially larger natural disasters than Utah recently? I can remember being warned to vacate our residence during fires that raged all over southern California a couple years ago, while we choked from the fire smoke filled air?

That's called 'smog', you tend to get that in the L.A. Basin.

It's not as if Utah hasn't had its share of wildfires either. Yes, they have less population density to move out for any particular fire, but they also have less population density to pay for it as well. Fortunately, federal disaster relief funds can be used for both CA and UT. But here's the thing. Even if you have more expenses, a rational person prioritises what they have to do. Let's say you buy a house. You are now paying a mortgage and your monthly bills about equal your income. Then there's a car accident, and you have to pay your $500 deductible, or whatever. Then your water heater bursts, and you have flooding damage in the house. And so on. Do you continue to spend money on everything from movies to cellphone plans, or do you decide to cut back your spending? Complaining that "the house next door hasn't had his water heater burst" doesn't solve your problem.
Oh, and instructing your employer to give you a raise probably won't work.

But when you look at the 2008 Real GDP for "Red" Arizona (McCain) and "Red" Alaska (Palin), you see only negative growth, with Alaska leading all 50 states with the greatest negative at -2.0?

The real question, though, is how they resolved the issue. Did they attempt to raise taxes and not cut spending, or did they tighten their belts? GDP is not necessarily a reflection of government coffers, a more instructive approach would be to look at tax incomes vs spending over 2008. CA's taxes are stupidly high already for the region, as the Nevada Dept of Industry put it, their best advertisment for setting up business in Nevada is California.

NTM