Luke’s Log- Northernomics, Southernomics, and Americanomics
Michael Lind and others have argued that the key to understanding American national politics is understanding the historic regional split between the Northern progressive way of life, and the Southern conservative way of life. Clearly these are not confined to a literal North-South divide at the Mason-Dixon Line- the West Coast states display ‘Northern’ cultures and policy views, while most of the Sun Belt and the Upper West displays archetypically ‘Southern’ ones- but the point is that there are two generally agreed-upon policy cultures in this country, and these are divided along both partisan lines (they correspond to the Democratic and Republican Parties, respectively) and along geographic lines.
Interestingly, both views were once housed within the Democratic Party, while a third view was housed within the Republican Party; but with the extinguishment of the Progressive Republicans, as Geoffrey Kabaservice details, the parties realigned into ideological blocs, with the Democrats solidly favoring Northernomics and the Republicans strongly favoring Southernomics. More on that third tradition later.
Northernomics is similar to the progressive aspects of FDR’s New Deal- it is built around full employment, strong entitlements, high wages, government partnership with big business and big labor, heavy regulations, and generally something resembling a social democratic planned economy without quite getting there. California Governor Jerry Brown and former New York City Mayor Michael Bloomberg exemplify this high-density, heavy government intervention-based model.
Southernomics, meanwhile, tends to look a lot like the rhetoric of President Ronald Reagan- low taxes, cheap labor, slashing of government spending, easing of regulations on business, large tax cuts, and a generally laissez-faire attitude towards the economy. Kansas Governor Sam Brownback and former Texas Governor Rick Perry exemplify this model.
Both sides think they promote growth and opportunity better than the others. Northernomists point to the heavy degree of investment in the great cities and the high amounts of tourism and financial growth their coastal enclaves experience. Southernomists cite their regions’ massive business growth and the migration trends favoring the Sun Belt and Great Plains over the coasts.
In reality, both economic models owe more to their geography than anything else- Northernomics is based on commerce and industry, which flourish historically on the coasts, while Southernomics is based on cheap land and free labor, which are more common on the inland expanses. But second to their geographies that perpetuate their unique economic advantages, both economies rely upon the vigorous exercise of another kind of economic policy that has largely exited the American political discourse today. Let’s call it Americanomics.
Americonomists are both pro-government and pro-business, preferring a favorable business climate of low corporate taxes, while favoring sound regulations and high-wage labor. More importantly, Americonomists favor huge, smart government investment in three main areas- critical infrastructure, basic research, and education- and they support these as the main areas where government must lead the way in order to pioneer future economic growth.
This strategic calculus in economics was crucial to the development of the ‘Northern’ states, where federal investment created the research universities and corporate conditions that allowed the rise of the great commercial cities we know today, and it was equally critical for the development of the ‘Southern’ states, where federal investment in productive infrastructure and education modernized those areas and pulled them out of the resource-based economies of the 19th Century.
This third tradition goes unspoken much of the time, but it accounts for much of America’s economic success. We would be wise to start talking about it again.