November 8, 2012
IN THE LAND OF HOPEY-CHANGEY: Empire of the In-Between. “As anyone who rides Amtrak between New York and Washington knows, the trip can be a dissonant experience. Inside the train, it’s all tidy and digital, everybody absorbed in laptops and iPhones, while outside the windows an entirely different world glides by. Traveling south is like moving through a curated exhibit of urban and industrial decay. There’s Newark and Trenton and the heroic wreckage in parts of Philadelphia, block after block of hulking edifices covered in graffiti, the boarded-up ghost neighborhoods of Baltimore made familiar by ‘The Wire’ — all on the line that connects America’s financial center and its booming capital city.” Kinda like the Hunger Games. Plus: “In the case of those areas surrounding the capital, wealth has gravitated to the exact spot where government regulation is created. Why? Because many businesses discovered that renegotiating the terms between government and the private sector can be extraordinarily lucrative. A few remarkable books by professors at N.Y.U.’s Stern School of Business argue that a primary source of profit for Wall Street over the past 15 to 20 years could be what I call the Acela Strategy: making money by exploiting regulation rather than by creating more effective ways to finance the rest of the economy.”
UPDATE: A critique from Andrew Hofer:
First of all, it is ridiculous to make judgements about policy and country by looking out the window of a passing train. I lived in Japan for a while in 1983-1984 and the train views were awful. Next to the tracks is not prime real estate anywhere.
Furthermore, as someone who started his career as a lender in the mid-Atlantic, I suggest another reason for the burnout of the Amtrak Corridor – environmental overzealousness. This was prime manufacturing territory in the past, but the NJ Department of Environmental Protection (and the EPA) have made it ridiculously difficult to buy, improve and operate manufacturing facilities there. I had a client in NJ years ago who figured out how to HALVE their VOC emissions through dynamic temperature control in their stack. This required putting *trace* amounts of inert gas (N2O) up the stack for measurement purposes. They showed it off to NJDEP and what happened? They were fined heavily for the N2O installation and told to install a much more expensive stack that left more VOCs in their emissions than their current system. They aren’t there anymore, of course. Also, the amount of property liability anybody takes in NJ to buy an old manufacturing plant in NJ (and elsewhere in the country) is prohibitive. So they sit abandoned. Environmental is only one form of regulation that effectively taxes small business around here. Everyone likes to blame labor costs, but that is only a small part of the reason nobody makes stuff in the Mid-Atlantic anymore.
Then there is urban policy. After all, even non-manufacturing inner city areas experience this kind of blight. Trenton is, of course, the worst. The city was left to the government and organized crime for decades.
To the extent there is a difference. . . .
ANOTHER UPDATE: Prof. Stephen Clark writes:
You’ve noted the fact that Romney drew fewer votes than McCain and now have noted that TV ratings were down from ’08. Just as people have given up the search for a paying job, I wonder how many have simply given up on the system. Read this piece by Brendan O’Neill and the piece by Kotkin to which he refers. Many people may simply no longer wish to take part in a game which they feel is rigged against them, and I’m inclined to that point of view myself frankly. Of course that brings to mind the Heinlein quote, “Of course the game is rigged. Don’t let that stop you–if you don’t play, you can’t win.”
However, the system we currently have is deeply immoral. In the vain pursuit of creating a heaven-on-earth today, all parties, and the electorate generally, collaborate in the enslavement – and the word is appropriate – of generations too young to vote and those not yet born. The trillions of dollars of unfunded liabilities that we have created will fall on precisely these generations without their consent. They have been disenfranchised and are being fitted with chains that will bind as surely as those applied to generations stolen from Africa centuries ago. This mocks the sacrifice made in blood and treasure of current and past generations who thought they were striving for something far different. When I wrote last evening suggesting that Obama and Reid’s bluff be called in the standoff over the looming fiscal cliff, it was with this in mind.
Given the general goodness of the man that his biography portrays, I thought that Romney could have been the man to make precisely this case. It is a case that resonates with history of his party and it is a stark and fitting indictment of our society.
True enough, but that doesn’t let us off the hook in terms of trying to make it better.