Hat tip to The Urbanophile for pointing me to a blog that appears to be well worth paying attention to: The Midwesterner: Blogging the Global Midwest. It really caught my eye with a post entitled America Throws in the Towel:
While China was joining the global economy and building the foundation of its current growth, the United States was cutting taxes, fighting two unfunded wars and promoting the mother of all housing bubbles. When the global recession began, the United States — the world’s biggest economy — landed in a slump that continues to this day. China — the second biggest economy — kept the stimulus funds flowing and barely slowed up.
The comparisons between the world’s two largest economies are stark — and, for Americans, distressing.
Another post that caught my eye was on the foolishness of trade wars between the states:
It’s precisely these states’ inability to compete globally that causes them to declare war on the folks next door.
In a global economy, Kansas and Missouri aren’t competing with each other, any more than Illinois, Indiana and Wisconsin are competing with each other. The real competition is 10,000 miles away and all Midwesterners know that we’re losing it. The region — not just the individual cities and states but the entire region — is losing companies, manufacturing, jobs, people, congressional seats and college grads, which means they’re losing the resources needed to compete in a global economy.
. . .
Only one person gains if a business crosses the state line, and that’s the “winning” governor, who gets to claim short-term job growth on his turf during his tenure. This, of course, is why this practice continues. The payoff to the governor is immediate and gives him a boost in his next campaign.
Go check it out.
I half-way agree with this article. Sure governors like big prestige projects, the bigger the better. Voters want jobs for themselves, family and neighbors. Ribbon cutting ceremonies are evidence that politicians “care”, but most folks are employed by smaller firms that don’t qualify, don’t make headlines and have little clout. Special interest provisions for some corrupt the tax code, raising rates for disfavored groups and raising compliance costs.
There is a load of research that shows that costs and taxation do matter, however. Costs can never be dismissed and a driver of firm behavior. If they don’t try to maximize revenue and minimize costs they won’t be around for long. We need to look at government with a similar perspective sometimes– value for money.