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The Red State-Blue State Divide: Is Economy the Driver?

In 1980, the big-city states were down to 103%, where they have pretty much stayed for the past 30 years. Given that these states also have higher taxes and living costs, it can be accurately said that their standard of living has stagnated. New York, which was 65% wealthier than the national average at the end of the “Roaring Twenties,” was only 8% wealthier by 1980. Michigan, with its famous problems of the auto industry in Detroit, has seen its relative wealth decline a stunning 20 points (107% of the national average to 87%) from the 1950 census to the 2010 census, the worst drop of any big state. The story in New England is much the same as their relative incomes have also stagnated. Perhaps we should not be surprised then that the last Republican nominee to carry a majority of these states was the first George Bush in 1988.

The eight states of the Mountain West region also help bolster this economic theory. In the 1930 census, the Mountain states had only 87% of the national average income. Accordingly, they voted for FDR and Truman five straight times. But by 1950, the incomes of the Mountain West had equaled the national average and this booming new middle class helped Republican nominees carry a majority in the region in every election except 1964 for the next 40 years, in fact shutting out the Democrats in the presidential elections of 1952, 1956, 1968, 1972, 1976, 1980, 1984, and 1988.

By the 1990s however, immigration from the Third World (mostly Latin America) had caused the per capita incomes of the Mountain region states to drop below the national average again (to 93% in the latest Census). Since 1990, Democrats, with the help of independent candidate Ross Perot in 1990s, have become very competitive in the Mountain region again, getting shut out only in 2004.

So the “Frost Belt” has lost relative economic strength since the days of FDR and has drifted away from the Republicans. The South has posted huge economic gains in the same time frame and is now part of the Republican base. The Mountain West, intriguing as always, went Republican in the 1950s when their incomes began to equal the national average and stayed in the Republican fold for the next four decades, but began to drift away from the GOP in the early 1990s when immigration helped once again make the region poorer than the national average.

James Carville, Bill Clinton’s successful campaign manager in 1992, famously proclaimed: “It’s the economy, stupid.” Mr. Carville’s wisdom lives on -- it looks like political destinies in the 21st century are largely shaped by whether a state’s economy is on the way up or down.