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Matt Stoller @matthewstoller
, 14 tweets, 3 min read Read on Twitter
1. Since there's always chatter about natural economic forces leading to superstar cities, here's a quick thread on regional inequality and the policy levers that led us there. There are two divides. Rural vs urban and superstar cities vs everyone else.
2. Regional divide is post-1980 phenomenon. First problem is you can't there from here. That's because Jimmy Carter deregulated airlines in 1978. This meant travel between coastal cities was cheaper, but many other cities and regions lost air transportation.
3. Another part of the 'you can't there from here' is the lost access to trucks and trains. Again, this was Jimmy Carter in 1980 through deregulation. Shippers - aka Farmers, chemical makers, paper mills, heavy industry, etc - all lost access to markets.
4. Another policy shift was... banking deregulation, the end of interstate banking restrictions throughout the 1970s and 1980s and 1990s. Lost local banks which provide local credit, centralization of credit in coastal areas.
5. Then there were the changes in retail pricing rules, Robinson-Patman and fair trade laws. This destroyed local retailers and opened up the road for Walmart. It also helped eliminate local manufacturing, centralize it, and offshore it.
6. There was the 1982 substantial relaxation of anti-merger law. Regional cities had headquarters of local corporations stripped out as big companies bought up competitors.
7. Patent laws became far more restrictive in the 1980s and 1990s, leading to the inability to start tech firms anywhere but near tech clusters where the lawyers and financiers lived.
8. There are many other levers. Tax changes in the 1980s (and more recently the Trump tax cuts) pooled capital in areas where the super-rich already live. Bankruptcy rules helped privilege big creditors, who large live in coastal gilded cities.
9. Another interesting set of changes were the restructuring of farm supports, from supply management programs protecting local farms to prioritizing large scale production and big ag monopolization. Changes in meat-packing as well to consolidate chicken, beef, pork industries.
10. Bottom line, there's nothing inevitable or natural about any of this. America ran a policy to equalize dense and rural areas of the nation for 200 years. In the 1970s, we flipped those policy levers. This is where we are now. It's not superstar cities, it's policy.
11. A good amount of the anger from populists in the heartland is old school regional resentment. Gilded cities are treating the heartland like a colony, stripping it of wealth and autonomy. Those cities are super blue areas, so heartland populists resent Democrats and liberals.
12. Anyway, if someone tries to make abstract arguments about why New York City is doing so well versus Iowa, ignore them. It's a simple story. It's damn hard to get to Iowa because we changed our policies to allow airlines and the financiers who love them to kill the heartland.
13. It's possible to argue Dem policies are better for the heartland. But it's impossible to argue Dem policies are *good* for the heartland. Sorry, but expanded Medicaid, which is our best idea, doesn't make it easier to travel from Appalachia (or entice doctors there).
14. This is fixable. We just have to fix it. And that means dispensing with the silly myths about how people in blue areas are just better people. No, people in blue areas have trains and planes and banks. (Also they have rampant inequality and homelessness, a related problem.)
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