Understanding the Blue State Diaspora

by lizard

Matthew Yglesias has a piece at Vox today about The biggest thing that blue states are screwing up:

Robert Gebelhoff and David Leonhardt have a fascinating piece in the Upshot about what they call the growing Blue State Diaspora — the large net flow of Americans out of blue states and into red ones. The two key facts are that between 2000 and 2012, the blue-born population living in red states grew over 20 percent to 11.5 million while the red-born population living in blue states shrank to 7.3 million from 8.4 million.

Gebelhoff and Leonhardt mostly go on to discuss the implications of these flows for partisan politics, but I think what’s most important is the causes. Liberals, in particular, might want to do some reflecting about the fact that Americans are voting with their feet against blue states.

So, what significant factors are behind this diaspora? More from the link:

Conservatives, of course, tend to think they know the answer — Americans are fleeing the high taxes and malgovernment of blue America. The city of Detroit often comes up in this context, and it is certainly true that malgovernment (among other things) has made that city and several others into an increasingly undesirable place to live.

On the other hand, if Detroit were the typical blue American city then houses in the Mission and Park Slope would be cheaper than houses in the suburbs of Atlanta and Dallas. The truth is that while there are pockets of economic pain all around the country, in general Blue America seems like a pretty nice place where wages, incomes, health outcomes, and education levels are generally higher.

So why does everyone leave? Well precisely because houses in Blue America generally aren’t cheap like Detroit. They’re more often expensive like San Francisco. As Dylan Matthews wrote last week, coastal states are generally more expensive.

This doesn’t bode well for those who get defensive when Republicans talk about Liberal elitism. The claim appears to have some merit.

Missoula is a microcosm of this trend within Montana. Most of my friends from the college days had to move away because they couldn’t afford to stay here.

And then there’s the attempt to subsidize affordable housing. Sometimes those attempts are less than successful, like the Burns Street Commons, a project Missoula had to further subsidize with loan forgiveness back in 2012:

A proposal to forgive a city loan to the Burns Street Commons, an affordable housing complex, has not been fully vetted in the public eye and has the potential to give other similar projects a black eye, according to some other supporters of affordable housing.

The North Missoula Community Development Corp. built the Burns Street Commons – 17 units, community space and a grocery store – but the project is struggling with $1.14 million of debt.

To help, the city of Missoula earlier loaned the development corporation $400,000, and on Monday the Missoula City Council will consider forgiving $243,000 of that amount.

Councilman Bob Jaffe, who is recommending the loan forgiveness, said the homes never got enough public support in the first place. So the proposal only brings the subsidy to “within the normal range.”

And according to one resident and supporter of the land trust model, partial loan forgiveness is the best option for affordable home ownership for generations to come. Gabriel Furshong, a resident board member of the North Missoula Community Development Corp., said the benefit of keeping the land permanently in trust has been lost in the conversation.

Maybe it’s just me, but when I think of affordable housing, I think of trying to help the poorest in our community find housing that doesn’t exceed 30% of their income. But for the Burns Street Commons, affordable housing is a condo for $150,000 dollars.

I agree with Yglesias, housing is the biggest thing blue states (and blue cities) are screwing up. If liberals want to actually help the demographics they pander to and take for granted, they might want to reflect on this failure.


  1. When I think of Detroit I remind myself of these 4 rules.

    “Government is inherently inefficient and invites corruption”

    The four basic rules:

    1) All organizations tend toward growth;
    2) The larger the organization becomes, the more inefficient and corruptible it becomes;
    3) The more corruptible it becomes, the more corrupt it becomes;
    4) The more corrupt it becomes, the more coercive it becomes.

    • Wouldn’t it be funny if, even as that sounds profound, it were only occasional true, often false, and not even close to a truism.

      • mike

        Reality says you are wrong, nice try.

    • lizard19

      geez Swede, that almost sounds like a critique of our corporate/crony capitalist system.

      • Could be. For example look at IBM, they were eclipsed by Apple and Microsoft. A prime example of bloat and inefficiency.

        What makes it worse is when two behemoths act in collusion. An example would be GE and our Govt.. Another would be Solyndra or Warren Buffet conspiring with the POTUS in blocking XL while cutting huge rail shipping contracts. Or even bailing out banks and GM while he should have let them fail.

        Anyway corporations should be allow to innovate or fail. Govts. seldom fail, they just get coercive. That’s the difference.

        • Take money out of politics, and corporations fall all around us like water balloons.

          • No corporations=no middle class.

            • So corporate socialism trickles down?

        • There’d be no Obamacare, for instance, and no WellPoint, United Health, Humana, just to cite one sector where crony capitalism dictates policy and keeps inefficient rent seekers afloat.

  2. Just a guy

    Great column, very relevant to Missoula County. Property taxes that are high relative to incomes plus artificial land shortages created by local land use policies aren’t helping with the affordability of housing.

    The property tax bill on a $200,000 home is about $4,000 and median income for a family is only $44,000.

    We have a rigid urban growth boundary through growth policies/UFDA and recently tried to use subdivision review standards and a loose definition of the words “agricultural land” to further reduce supplies of land for residential development.

    To make matters worse, Missoula County is known for an obstreperous local government that unreasonably delays developments with red tape, further driving up costs.

    There are consequences for Missoula County. The median income for a family of four only provides 79% of the income necessary to purchase a median priced home. 40% of renters spend 35% or more of their income on housing.

    Of course, the valley’s geographic features and market demand also play roled in housing costs, but local government and special interests aren’t helping.

    • JC

      Don’t forget the price fixing by realtors and property managers.

      • Just a guy

        Do you have any data suggesting that the local housing market is concentrated enough to realistically allow price fixing/collusion? I’m not saying that price fixing doesn’t occur in certain markets (telecomm and big agribusiness come to mind), but my experience is that isn’t happening in the local housing market.

        I think you might be mistaking price fixing for similarities in price due to similarities in market conditions. Folks who sell/rent housing all operate in the same market and under the same set of constraints. We can’t expect them to make uneconomic price decisions just because we think they should.

        • JC

          Data? If there were data available on price fixing/collusion surely the DA or AG would be jumping on it, right?

          I could offer a lot of circumstantial and anecdotal evidence, but that’s not what you’re looking for. So, just call it my informed opinion.

          • mike

            So it’s your fantasy and we should stay out of it…thats a useful arguement, hate to use internet memes but rofl

  3. steve kelly

    Just curious, Swede, is Burger King’s “inversion,” innovating, or just gaming the tax system? Aren’t there enough “write-offs” for them to profit sufficiently already?

    In Missoula, like in Bozeman, the banking/real estate/building/timber cabal control government enough to keep prices rediculously high. By keeping land prices artificially high, they pretty much control the market. As a result, small homes are outrageously priced relative to larger homes. Families with low to moderate incomes are forced into to cheaply-built condos and apartment complexes or go homeless. Rents are fixed below home-mortgage prices just enough to limit individuals from buying homes to rent for a little supplemental income. Even in a market of rising home prices, rents never seem to catch up.

    If government ever becomes serious about affordable housing, it will need to start by purchasing land on which to build, and not get (insider trading) caught paying over the market rate, which always seems to happen when land is purchased for a new public school, or other public facility.

    • James Maxie

      If there were enough write-offs here that would save Burger King’s bottom line they would “stay” here. But the U.S. has a unique policy of taxing profits at the same rate wherever those profits are realized. I think we’re one of the only developed countries that imposes its tax rate on earnings made elsewhere.

      • False.

      • James Maxie

        Which part?

        • “think we’re one of the only developed countries that imposes its tax rate on earnings made elsewhere.”

          • James Maxie

            Ya got the rope wrapped around the axle on this one Mark. Here are the facts:

            “The United States, unlike most developed-world governments, insists on taxing the global income of its citizens and corporations that have U.S. headquarters. And because the U.S. has some of the highest tax rates in the world, especially on corporate income, this amounts to demanding that everyone who got their start here pay us taxes, forever, on anything they earn abroad.”

            http://www.newsobserver.com/2014/08/27/4101280/burger-king-and-the-global-tax.html#storylink=cpy

            • Pasted below,in error: Because of tax treaties and tax havens, no matter your source here, the statement is false.

      • JC

        You ever think that maybe they just have a crappy product? Maybe once they move out of the U.S. they’ll start closing BK joints. Wouldn’t bother me in the least. I haven’t eaten there in at least 10 years.

        • BK was rated by customers in a Consumer Reports as the 3rd or 4th worst fast food outlet in the country. I’d be very surprised if Canada likes them better.

    • Just a guy

      So an evil business cabal controls government in Missoula, huh? That’s rich.

      You don’t suppose that the frivolous environmental lawsuits you file to block timber sales, high property taxes, and land use policies that create artificial shortages of developable land have anything to do with the lack of affordable housing?

      Most of the ills you cite in the second paragraph are largely of the radical left’s own making.

      • JC

        If you win lawsuits, they’re not frivolous. If a judge allows you to take the case to trial, it’s not frivolous. If a judge throws a lawsuit out before trial, it may be frivolous.

        Why don’t you just come out and say you don’t like our environmental and land use laws, instead of taking your anger out on the messengers saying that something is amiss when developers, loggers and miners, and the federal/state/local governments violate laws passed to protect a wide range of public and habitat values.

        And if you don’t like the laws and regs we have, then take it out on those who passed and promulgated them, not those who seek to see that our current laws and regs are upheld.

        It sounds more like you want to see some anarchy in this country.

    • mike

      yo steve, the timber cabal has been dead for twenty years and you and your ilke were responsible…job well done.

      And then you piss and moan that killing good jobs where the jobs in question pay the taxes that will fund the free shit that you are calling for…you are fucking delusional , my friend, statists like you will kill what is left of this nation.

      BTW it’s not the governments duty to provide housing…in case you missed it collectevism didn’t work, see Mao and Stalin’, if you want to steal from me you will have a problem dude,

  4. steve kelly

    And, does that mean we’ve got it wrong because oligarchs and plutocrats have found ways to force others to submit to their insatiable greed and criminality against all living things. Not to worry, we may be the last to fall to their extortion, but nothing seems to be in their way that can stop them.

    I see “inversion” more as a coordinated extortion tactic to lower corporate tax rates. Heritage is pushing this hard, as is the Chamber.

    • “The U.S. tax system is so burdensome and arbitrary that a 2013 study undertaken by a European think tank ranked it 94th out of 100, right after Zimbabwe, for its impact on business competitiveness. No wonder the U.S. economy is growing at half the pace as during the Reagan-Clinton years and creating about one-sixth the jobs.”-Perter Morici.

      • Name the European think tank and its source of funding, and explain the changes in the tax code since Reagan-Clinton that have had deleterious effects, please and thank you.

        Please explain the difference between tax rates and actual tax payments too, please, and thank you.

        • James Maxie

          False.

        • Because of tax treaties and tax havens, no matter your source here, the statement is false.

          • Corporate taxes went up since R/C, same with taxing overseas profits.

            I sure our thousand pages of tax codes increased too.

          • Corporations should be heavily taxed as the price for the privilege of allowing them to exist. We are, after all, their masters, right? We own them, not the opposite, right? We give them legal life, limited liability, in return, they pony up some tax revenue.

            If they can dictate public policy by threatening to leave a jurisdiction, then we are not in charge of them, are we, and we do not have democratic rule, do we?

            • mike

              yo, moron, the customers of corporations pay the taxes, if you can’t see this you have no sense of economics

            • You sound rather stupid, but I’ll answer: Corporations must maximize their revenue in the marketplace, as that is their job. having done so, and then facing a tax bill, they cannot just arbitrarily say “let’s increase prices to pay taxes.”

              Ergo, taxes on corporate profits come from the pockets of investors. If indeed they can just pass them on to customers, then Econ101 is nonsense.

  5. steve kelly

    Oh, please! 26 corporations paid zero! http://www.ctj.org/corporatetaxdodgers/sorrystateofcorptaxes.php

    And thank you very much.

    • But Steve, you’re looking at the wrong picture! It’s the legal rates, not the actual taxes they pay! Smarten up dammit!

  6. mike

    yo steve, that’s because people like patty poo and cantwell massage subsidies like the EXIM bank.

    Progs like Mark and steve piss and moan about subsidies when they are favored by their tribe. I’m against them all, whether the freebies come from an R or a D source as I’m against bribery.

    But when progs engage in extortion and bribery it’s AOK. SMH, the parade af progtards here is instructive.

    • Somebody translate that for me please. I don’t speak stupid.




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