Growing States Have Right to Work Laws; Declining States Do Not

According to the  Albany Times Union:

New York’s [population] percentage increase was just 0.1 percent making it the 41st fastest-growing state in terms of percentage increase. Idaho was the fastest growing at 2.2 percent from July 1, 2016 to July 1, 2017, according the Census Bureau.  

The high-tax, pro-union states are the slowest-growing or declining while the low-tax, right to work states are the fastest growing: 

Right behind Idaho, with increases were Nevada at 2 percent; Utah, 1.9 percent; Washington; 1.7 percent; and at 1.6 percent each, Florida and Arizona.  

Only one of the high-population-growth states, Washington, is not a right to work state.  

According to Governing.com, the states with declining populations include Illinois, New Mexico, Maine, and Vermont, which don't have right to work laws. Vermont is the state that has repeatedly elected Bernie Sanders. It has among the worst population declines in the country.

West Virginia passed its right to work law in 2016, so although it has had a declining population and numerous other problems, it will be interesting to see whether its declines start to reverse as it deregulates. Vermont is the state that has repeatedly elected Bernie Sanders. It has among the worst population declines in the country.

The only state with a declining population and a longstanding right to work laws is Mississippi.

The Disadvantages of Trade Are Due to Federal Intervention

The federal government, not trade, is the source of social losses from the exit of manufacturing firms. Trade always results in making the parties to the trade better off. It may result in one party's being made better off to a greater degree than the other, but without both parties' being made better off they wouldn't trade.

The declining automobile industry and Chinese manufacturing illustrate separate issues. With respect to the US auto industry in the 1960s and into the 1970s, when I was in high school and after, consumer advocates talked in terms of "planned obsolescence"--that American car makers deliberately produced badly made cars so that consumers would be forced to buy new ones within a few years. That was probably an exaggeration of the Big Three's competence: They produced bad cars because their management systems were crummy, not because they consciously made bad cars. The 1979 book by John Z. DeLorean and Patrick Wright "On a Clear Day You Can See General Motors" covers GM's often laughable incompetence.

Thus, global competition has been a boon to Americans. It increased the quality of cars because of the Toyota production system invented by Taiichi Ohno and the Toyoda family. The result is that cars that once had to be junked at 100,000 miles or less now frequently last 300,000 miles.

That means every American who buys a car enjoys three times the value. Although American auto workers lost their jobs (a plight amply illustrated in Michael Moore's best work, "Roger and Me"), Americans have on balance been made better off by trade.

With respect to China, there is a combination of issues. First, labor costs are lower in China, and there is a reason to move labor-intensive plants there and to other low-wage countries. Low labor costs mean lower prices to Americans. One of the reasons we have sustained a relatively high standard of living is the inexpensive merchandise at big box stores due to low labor costs in China.

At the same time, plant relocation requires capital investment, and when capital is at its market rate, there is an impediment to making risky and costly moves. The costs of relocation have been suppressed by the federal government and the Federal Reserve Bank. By keeping interest rates artificially low, firms have been able to invest in plant relocation and make other labor-cutting capital investment at subsidized cost. There likely has been overinvestment in labor-saving technology as well as plant relocation because of suppressed capital costs.

Hence, the relocations and the loss of blue collar jobs are not entirely due to free trade. They are in part due to the federal government's subsidization of capital investment.

That's not the only way, though, that big government interventionists have hurt blue collar workers. During the same period that it subsidized plant relocations, the federal government increased all kinds of regulation, from human resources and employee benefits to OSHA, to environmental regulation, to Sarbanes-Oxley, to product liability. In addition, it raised corporate tax rates. The Democratic Party's policy mix seems designed to force manufacturing to move overseas.

Moreover, and most importantly, the federal government through its protected monopoly, the Federal Reserve Bank, has inflated the money supply while the dollar is used as the world's reserve currency. Foreign holdings of dollars limit the inflationary effect of historically low interest rates. The dollar remains relatively strong despite massive increases in the number of dollars.

In a free market trade regime, if many manufacturers exit a home country and sell their goods back to the home country, the value of the home currency will decline. That has not occurred. Rather, the dollar has retained its relative value despite the exodus of manufacturing to China. The reserve currency status of the dollar allows the Fed to subsidize privileged industries in services, government, education, and health care while it drives productive industry to China.

It is not surprising that President Trump's often-blue collar supporters have been skeptical of trade, for the managed version of it has harmed their interests. In contrast, the well-to-do beneficiaries of Fed policies, stock market investors, Wall Street, government employees, beneficiaries of government welfare plans, real estate developers, professionals like psychologists who benefit from state programs, are key constituencies of the big government economy. Notice that none of these produce much of value. America's has increasingly become a vampire economy.

Walter Weyl and the Escalation of American Mental Uniformity

In the late nineteenth century the standardization of parts contributed to American competitiveness. That idea was taken further by the Progressives, who incorrectly assumed that increasing scale and centralizing management would improve efficiency. The assumption of the historian Alfred Chandler (in his books The Visible Hand and Strategy and Structure) that increased scale means increased efficiency is not a rule at all. Toyota showed that nimble management technique can easily overcome inefficient manufacturers of the largest scale.

The current trend toward conformity of thought, standardization of consumption, and media-induced mass hysteria continues the incorrect, 130-year-old theory of the Progressives that standardization and scale are the most important sources of efficiency.

Centralized financial control via the Fed is central to this process. I wrote a piece that hasn't been published about how a similar process applied to higher education. You see the same thing with K-12 education. The Dept. of Education was a first step toward national centralization, but the process began in the first half of the 19th century with Horace Mann's advocacy of public education. Widespread adoption of teacher education in the mid-twentieth century standardized the ideological framework that infuses K-12. Diane Ravitch's Left Back: A Century of Battles over School Reform focuses on teaching methodology and progressive education, but there was ideological content affiliated with progressive education theory.

The result of a century of increasingly standardized training is increased standardization of thinking. The now-declining centralized mass media has also played an important role, and I suspect that the debate about Internet regulation is linked to the need to think strategically about homogenizing content by regulators in the Progressive tradition.

The argument for obtaining ever more education in the name of supposed higher wages of graduates is a tacit argument for uniformity of thinking. Relatively few grads study science or technology. The bulk study business, education, and psychology. They often learn little, but their behavior and thinking are standardized. (Christopher Loss discusses the emphasis on human resource management as an aim of higher education in the first chapter of his important book Between Citizen and State.)

The Progressives were the ones who instituted today's educational system. Horace Mann was the first advocate of public education, but the current approach with high school, elementary school, and college admission based on standardized testing was the creation of the early 1900s.

What we are witnessing is a playing out of the Progressive ideology of someone like Progressive ideologue Walter Weyl. (Weyl cofounded the New Republic magazine with two other central Progressive thinkers, Walter Lippmann and Herbert Croly.) Weyl saw Progressivism as leading to socialism, and in this he was prescient. He did not anticipate the continued vibrancy of the free market economy, and its ability to innovate.

For instance, Weyl thought that Progressivism would lead to a perfectly planned national train system; he didn't realize that air travel would replace trains. Progressivism has no place for the kind of rapid innovation that took place under laissez faire capitalism. It requires a slow, limited rate of innovation, and it incorrectly assumes that scale and standardization increase efficiency and wealth. 

Government Regulation and Monopoly

Since the days of Standard Oil government has claimed that it was necessary to regulate monopolies. Since those same days, the chief monopolies have been the result of the regulation, and the least monopoly has occurred in the least -regulated industries. The calls for regulation of firms like A&P would have retarded innovations like Wal-Mart; regulation of Wal-Mart would have retarded Amazon. Government regulation is the chief source of monopoly. It has been consistently unsuccessful at stopping it, and it has been consistently successful at causing it.