Exposing the Weakness of the ‘Blue-State’ Model

New York Times op-ed columnist Ross Douthat had an interesting piece yesterday suggesting that the current recession has exposed some weaknesses of the “blue-state” model:

Consider Texas and California. In the Bush years, liberal polemicists turned the president’s home state — pious, lightly regulated, stingy with public services and mad for sprawl — into a symbol of everything that was barbaric about Republican America. Meanwhile, California, always liberalism’s favorite laboratory, was passing global-warming legislation, pouring billions into stem-cell research, and seemed to be negotiating its way toward universal health care.

But flash forward to the current recession, and suddenly Texas looks like a model citizen. The Lone Star kept growing well after the country had dipped into recession. Its unemployment rate and foreclosure rate are both well below the national average. It’s one of only six states that didn’t run budget deficits in 2009. […]

The urban scholar Joel Kotkin has called this recession a blue-state “meltdown.” That overstates the case: The Deep South has been hit hard by unemployment, and some liberal regions are weathering the storm reasonably well. And clearly part of the blame for the current crisis rests with decisions made in George W. Bush’s Washington.

But in state capital after state capital, the downturn has highlighted the weaknesses of liberal governance — the zeal for unsustainable social spending, the preference for regulation over job creation, the heavy reliance for tax revenue on the volatile incomes of the upper upper class.

It’s unfortunate that it sometimes takes a fiscal crisis to remind people that the “nanny state” governance model is economically and fiscally unsustainable, but that’s what many Americans are starting to discover now. Better late than never, I suppose. You’d think that the longtime spectacle of California’s fiscal recklessness would have already been enough, but some lessons are hard to learn.

See my own Texas vs. California comparison here.

Leonard Gilroy is Senior Managing Director of the Pension Integrity Project at Reason Foundation, a nonprofit think tank advancing free minds and free markets. The Pension Integrity Project assists policymakers and other stakeholders in designing, analyzing and implementing public sector pension reforms.