Blue States Double Down On Suicide Strategy

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Forbes.com

Whatever President Obama proposes in his State of the Union for the economy, it is likely to fall victim to the predictable Washington gridlock. But a far more significant economic policy debate in America is taking place among the states, and the likely outcome may determine the country’s course in the post-Obama era.

On one side are the blue states, who believe that higher taxes are not only just, but also the road to stronger economic growth. This is somewhat ironic, since, as we pointed out earlier, higher taxes on the “rich” would seem to hurt their economies more, given their high concentration of high-income earners. However, showing themselves to be gluttons for punishment, many of these states have decided to double down on high taxes, raising their rates to unprecedented levels.

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The Cities Winning The Battle For The Fastest Growing High-Wage Sector In The U.S.

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Forbes.com

In an era in which many businesses that pay high wages have been shedding jobs, the wide-ranging employment category of professional, scientific and technical services has been a relatively stellar performer, expanding some 15% since 2001. In contrast, employment dropped over 20% in such lucrative fields as manufacturing and information-related businesses (media, telecom providers, software publishing) over the same period, and finance and wholesale trade experienced small declines.

With an average annual wage nearing $90,000, this category — which includes computer consulting and technical services, accounting, engineering and scientific research, as well as legal, management and marketing services — increasingly shapes the ability of regions to generate higher-wage jobs. In order to determine which metropolitan areas are doing best, Mark Schill of Praxis Strategy Group compiled rankings based on both long and short-term growth, as well as the extent and growth of each region’s business service economy compared to the national average.

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How The South Will Rise To Power Again

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Forbes.com

The common media view of the South is as a regressive region, full of overweight, prejudiced, exploited and undereducated numbskulls . This meme was perfectly captured in this Bill Maher-commissioned video from Alexandra Pelosi, the New York-based daughter of House Minority Leader Nancy Pelosi.

Given the level of imbecility, maybe we’d be better off if the former Confederate states exiled themselves into their own redneck empire. Travel writer Chuck Thompson recently suggested this approach in a new book. Right now, however, Northerners can content themselves with the largely total isolation of Southerners from the corridors of executive power.

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The New Places Where America’s Tech Future Is Taking Shape

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Forbes.com

Technology is reshaping our economic geography, but there’s disagreement as to how. Much of the media and pundits like Richard Florida assert that the tech revolution is bound to be centralized in the dense, often “hip” places where “smart” people cluster. Some, like Slate’s David Talbot, even fear the new tech wave may erode whatever soul is left to increasingly family free, neo-gilded age San Francisco.

Such claims have been bolstered by the tech boom of the past few years — especially the explosion of social media firms in places like Manhattan and San Francisco. Yet longer-term trends in tech employment suggest such favored media memes will ultimately prove well off the mark. Indeed, according to an analysis by the Praxis Strategy Group, the fastest growth over the past decade in STEM (science, technology, engineering and mathematics-related) employment has taken place not in the most fashionable cities but smaller, less dense metropolitan areas. Read more

The Blue-State Suicide Pact

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Forbes.com

With their enthusiastic backing of President Obama and the Democratic Party on Election Day, the bluest parts of America may have embraced a program utterly at odds with their economic self-interest. The almost uniform support of blue states’ congressional representatives for the administration’s campaign for tax “fairness” represents a kind of bizarre economic suicide pact.

Any move to raise taxes on the rich — defined as households making over $250,000 annually — strikes directly at the economies of these states, which depend heavily on the earnings of high-income professionals, entrepreneurs and technical workers. In fact, when you examine which states, and metropolitan areas, have the highest concentrations of such people, it turns out they are overwhelmingly located in the bluest states and regions.

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Off the Rails: How the Party of Lincoln Became the Party of Plutocrats

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The Daily Beast

For a century now, Republicans have confused being the party of plutocrats with being the party of prosperity. Thus Mitt Romney.

To win back the so-called 47 percent—an insulting description Romney doubled down after the election when he blamed his loss on Obama’s “gifts”—Republican might look farther back, past Calvin Coolidge and Herbert Hoover to their first president, Abraham Lincoln.

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Why it’s All About Ohio: The Five Nations of American Politics

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Reuters

Looking at Tuesday’s election results, it’s clear the United States has morphed into five distinct political nations. This marks a sharp consolidation of the nine cultural and economic regions that sociologist Joel Garreau laid out 30 years ago in his landmark book “The Nine Nations of North America.”

In political terms there are two solid blue nations, perched on opposite coasts, that have formed a large and powerful bloc. Opposing them are two almost equally red countries, which include the historic Confederacy as well as the vast open reaches between the Texas panhandle and the Canadian border.

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The Biggest Losers In The 2012 Elections: Entrepreneurs

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Forbes.com

Who lost the most in economic terms Tuesday? Certainly energy companies now face a potentially implacable foe — and a re-energized, increasingly hostile bureaucratic apparat. But it’s not them. Nor was it the rhetorically savaged plutocrats who in reality have been nurtured so well by the President’s economic tag team of Ben Bernanke and Tim Geithner.

The real losers are small business owners, or what might be called the aspirational middle class. The smaller business — with no galleon full of legal slaves pulling for them — will face more regulation of labor, particularly independent contracting. There will be more financial regulation, which is why Romney’s top contributors were all banks.

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The Biggest Winners From President Obama’s Re-Election: Crony Capitalists

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Forbes.com

President Obama’s re-election does not, as some conservatives suggest, represent a triumph of socialism. Instead, it marks the massive endorsement of an expanding crony capitalism that ultimately could reshape the already troubled American economic system beyond recognition.

Nowhere is this clearer than in the President’s victory in the Great Lakes states of Ohio, Michigan, Ohio and Wisconsin. All four of these states are highly dependent on manufacturing and, in particular, the auto industry. Without the bailout, it seems doubtful that Obama — who lost the white working class decisively in most of the country — could have won these critical states.

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Prairie Populism Goes Bust As Obama’s Democrats Lose The Empty Quarter

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The Daily Beast

Along Phillips Avenue, the main street of Sioux Falls, South Dakota, the local theater’s marquee is a tribute to the late Senator and 1972 presidential candidate George McGovern, who was buried last month, and is still regarded as a hero by many here. But with McGovern gone, it seems that the Democratic tradition of decent populism he epitomized was being interred along with him. Read more