I just want to call out this bit from Michael Lind’s “The Economic Civil War“:
If the major U.S. automobile companies go under, it will be partly because timely federal aid for them was blocked by members of Congress like Tennessee Senator Bob Corker, whose states have created their own counter-Detroit in the form of Japanese, Korean, and German transplant factories. The South will have risen by bringing down the North. Jefferson Davis will have had his revenge.
The most shocking thing about the alliance between the Southern states and America’s friendly but earnest economic rivals to destroy America’s most important industry is the fact that so few people find it shocking. Contrast the U.S. with the European Union. The nation-states of the European Union collaborate with each other in order to compete against foreign economic rivals, including the U.S., Japan, and China. By contrast, many states, particularly in the South, collaborate with foreign economic rivals of the U.S. in order to compete against other American states. Any British or French or German leader who proposed collaborating with Japan or the U.S. in order to wipe out industry and destroy jobs in neighboring EU member states would be jeered out of office. But it is perfectly acceptable for American states to connive with Asian and European countries in the destruction of industry elsewhere in the U.S.
It’s particularly galling when you realize most of the “Red” states receive more federal dollars than they pay in federal taxes, while most of the “Blue” states receive less federal dollars than they pay in federal taxes. However, Lind says that’s the way things have to be:
Second, the race to the bottom in taxes and public services must be stopped by means of federal revenue-sharing. In most industrial democracies, the central government contributes much of the money for local services. In the 21st century U.S., too, a much greater percentage of state and local public service funding should come from the federal government, in the form of general revenue sharing (a popular and effective program abolished by Reagan) as well as special purpose grants and loans for some needs like infrastructure.
This means that more tax money, not less, will flow from blue states to red states. But it is the price the blue states must pay for the survival of their own way of life in their own regions. Ruthless Southern state governments have been willing to underfund public education and other public services, while lavishing hundreds of millions of dollars to bribe Nissan, Toyota, and other foreign corporations into opening up factories in their borders. The Southern states cannot be forced to raise state and local taxes. But federal revenue-sharing can raise the level of public services in Mississippi and Louisiana, thereby leveling the playing field by leveling up, not down. Nor is revenue-sharing unfair to the blue state rich, because the federal government taxes the rich everywhere, including the rich few in poor states. Moreover, the gradual equalization of public service spending nationwide might be compensated for by reductions in high blue-state tax levels.
I suppose that makes sense, but right now I don’t think I like it.