It had the trappings of a reality television show: 238 competitors from across the country, twenty finalists, but only one victor. (Or, as it turned out, two.) Bidders sent gifts ranging from cacti to free sandwiches in hopes of getting Amazon to place a slice of its headquarters within their boundaries. Less tacky, but more concerning, were the billions of public dollars that cities and states offered the company, which has the eighteenth highest revenue in the world.
Grotesque as it was, Amazon’s HQ2 competition did offer insight into the strengths of its many contestants. Pittsburgh, which made the final twenty, highlighted the presence of Carnegie Mellon and the University of Pittsburgh, the thousands of local graduates with computer science degrees, and its “top food scene as ranked by Zagat.” Atlanta, another finalist, emphasized its multiple direct flights to Seattle and its subway system. A joint bid by Detroit and Windsor, Canada, pointed out that, by straddling the border, Amazon could take advantage of Canada’s weaker currency and friendlier immigration policies while remaining in a U.S. metropolis.
But Amazon was never going to Detroit or Atlanta or Pittsburgh. When the company announced that it was splitting the bounty between New York City and Arlington, Virginia, Jersey City Mayor Steven Fulop said what many were thinking, calling the search “a big joke just to wind up exactly where everybody guessed.” While many of the bidders had local talent, amenities, and often infrastructure, New York and D.C.—America’s financial capital and America’s literal capital—offered an unmatched concentration of economic and political power. For firms like Amazon, a monopolistic corporation that controls nearly 50 percent of America’s e-commerce market and has its eyes on much more, access to this kind of influence is an ideal way to protect the ability to dominate markets. It didn’t hurt that Amazon CEO Jeff Bezos already owned a house in each place, as well as the major newspaper, the Washington Post, in one of them.
The company’s decision is emblematic of a trend that goes far beyond Amazon. In recent years, growth in income and opportunity has overwhelmingly flowed to cities that are already wealthy, most of which are on the East or West Coast. In 1980, the per capita income in the richest 10 percent of metro areas was 1.4 times greater than in the poorest 10 percent. By 2014, it was 1.7 times greater. Similarly, a 2018 study by Issi Romem, a researcher at the University of California, Berkeley, found that the income of people moving into wealthy coastal areas far exceeds the income of people leaving. New residents of the San Francisco Bay Area, for example, earn around $13,000 more than the people they replaced. In struggling interior cities, the reverse is true. Americans who are moving to Greater Detroit make $4,000 less than the people moving out.
The vibrant growth of wealthy cities, in other words, comes at the expense of perfectly viable heartland cities. Places like Detroit or Pittsburgh have people and infrastructure aplenty. Almost all of these cities have dramatically lower housing costs than do elite coastal metro areas, a point that journalists bemoaning Amazon’s decision uniformly mentioned. If Amazon really cared about affordability, as the company suggested it did, then why did it go to two of the most expensive places on earth? Why would any company? The lack of easy answers confirmed Americans’ growing sense that the geographic clustering of opportunity is the result of a rigged economy.
The GOP’s disproportionate—and antidemocratic—Senate representation and the clustering of economic opportunity in elite coastal metro areas are closely related.
Exactly one week before Amazon’s announcement, America held a midterm election that produced an equally strange-yet-predictable outcome. Thanks to a “blue wave” of support, Democrats picked up forty seats in the House of Representatives, taking control of the chamber. Yet despite the Democrats’ nine-point advantage in the national vote, the GOP gained a net of two Senate seats.
The GOP’s disproportionate—and antidemocratic—Senate representation and the clustering of economic opportunity in elite coastal metro areas are closely related. Democrats won big in cities and suburbs all over the country, as they increasingly do. But metro areas in traditional swing states away from the coasts generally haven’t been growing much in recent decades, leaving the populations of those states skewing much more rural than they otherwise would. Meanwhile, wealth, opportunity, and growth have increasingly flowed to a handful of metro areas in states that are already Democratic strongholds. The Democratic Party, for example, managed to flip four seats and thus win every House district in fast-growing Orange County, California. Given Orange County’s history as a bastion of conservatism, that’s no small feat. But when it comes to the Senate, it changes nothing. California was already blue.
It also doesn’t change the Electoral College. Hillary Clinton was the first Democratic presidential candidate to win Orange County since 1936, en route to winning the popular vote by nearly three million. Unfortunately, her votes were lopsidedly concentrated in states where her victory was already assured. Donald Trump, meanwhile, eked out game-changing victories in Electoral College–rich midwestern states like Michigan, Wisconsin, and Pennsylvania (plus a blowout in Ohio, a former swing state). These states still have large metro areas, and Clinton won those regions. But these places—like Detroit, Cleveland, and Milwaukee—have for decades either grown very modestly or declined in population. So even big wins there didn’t offset the surge of votes Trump received in exurban, small-town, and rural parts of those states. This fact may have as much to do with Democrats’ struggles in these states as does the rightward shift of rural voters. After all, Colorado is heavily rural, but it has turned solidly blue in recent elections thanks to the explosive growth of Denver, one of the few recent non-coastal urban success stories.
To avoid watching in horror as the Senate slips away forever while the Electoral College map becomes ever more daunting, liberals need a long-term strategy to combat the decline of heartland cities—to turn Clevelands into Denvers. To do so, they need to first recognize that geographic inequality did not come out of nowhere. It is not the inevitable product of free market forces clustering new skill and innovation around where all the old skill and innovation are found—nothing makes people in St. Louis or Milwaukee any less talented than people in San Francisco or Washington, D.C. Instead, it’s the result of nearly four decades of policy choices in Washington—such as giving large banks and other corporations in elite coastal cities free rein to acquire rival firms headquartered in cities in America’s interior. This has stripped those interior cities of what were once their economic engines, even as it has enriched the already wealthy coastal megalopolises.
Fixing America’s regional inequality would be a good idea irrespective of its political implications. It would increase innovation and GDP across the country. With economies, as with professional sports leagues, having more cities that can compete ups everyone’s game. It would help curb the broader scourge of income inequality. And it would improve our quality of life by making it easier for talented people to stay with family and friends in the communities where they grew up, or to move wherever else they might like to go, rather than being channeled to a handful of overly expensive, traffic-choked megacities.
But reducing regional inequality is a case where what’s good for the country would also be good for the Democrats. In fact, if the party can’t find policy levers to boost growth rates—and hence the number of Democratic voters—in purple and red state metro areas, they will have a hard time ever overcoming the Republican geographic advantage in the Senate and Electoral College. Yet almost no one on the left talks as if they understand this reality.
To fix the problem, Democrats first have to realize they have one, and how it came to be.
Regional prosperity wasn’t always a zero-sum game. From 1930 through 1980, virtually every geographic section of the United States saw its per capita income trend towards the national average. In 1933, average income in the Southwest was not much over 60 percent of the national average. By 1979, it was nearly on par. New England, once 1.4 times wealthier than the country as a whole, fell to just slightly above average. These gains were visible in the nation’s cities. In 1969, the per capita income of Greater St. Louis was 83 percent as high as New York’s, and it climbed even higher in the subsequent decade. In 1978, metro Detroit’s average income was about the same as that of the New York tri-state area. In the mid-1960s, the twenty-five richest metropolitan areas included Milwaukee, Des Moines, and Cleveland. (Throughout this piece, I’m referring to metro areas as defined by the U.S. Office of Management and Budget, which uses census data to designate “metropolitan statistical areas.”)
This convergence helped the country develop a broad middle class. According to Harvard economists Peter Ganong and Daniel Shoag, approximately 30 percent of the growth in America’s hourly wage equality from 1940 to 1980 was the result of wages across different states increasingly resembling one another. In other words, growing equality between regions helped foster more equality within regions.
But suddenly, these trends reversed, and over the next several decades, regional inequality exploded. In 1980, New York City’s per capita income was 80 percent above the national average. By 2013, it was 172 percent higher. Incomes in Washington, D.C., and San Francisco, respectively, went from being 29 and 50 percent above average to 68 and 88 percent higher. Heartland cities, meanwhile, saw their wealth slip away. Gone from the list of America’s richest cities were Milwaukee, Des Moines, and Cleveland. By 2018, twenty of the top twenty-five were on the East or West Coast. Seven are in California. Minneapolis, which clocks in at number twenty-four, is the only entrant from the entire Midwest.
How did this happen? Some analysts cite the impact of deindustrialization. But while the decline of industrial jobs certainly played a role in the stagnation of the Midwest, other places that once had strong manufacturing industries—like New York and Boston—managed to rebound from manufacturing busts. Seattle provides an especially revealing case. Although it’s now one of America’s most affluent cities, in the 1970s it was one of the country’s most distressed. The local economy was heavily reliant on a sole manufacturer—Boeing—and when a mild recession led to a collapse in the airplane market, the region entered a tailspin. One out of every eight jobs in Greater Seattle was eliminated, and unemployment ticked above 12 percent. But, unlike Detroit, the city had the good luck of rearing Microsoft cofounders Bill Gates and Paul Allen, who met while attending the same private school on Seattle’s north side. They decided to return home to grow their then-nascent company, a choice that helped save their city.
Other experts argue that growing regional inequality is the inevitable product of the need for talent to cluster in today’s “innovative” economy. Berkeley economist Enrico Moretti has argued that “once a city attracts some innovative workers and innovative companies, its economy changes in ways that make it even more attractive to other innovators. In the end, this is what is causing the Great Divergence among American communities.”
To avoid watching in horror as the Senate slips away forever, liberals need a long-term strategy to combat the decline of heartland cities—to turn Clevelands into Denvers.
Moretti is right that the education levels of a region’s population help shape its future. Most of today’s most prosperous cities had a higher proportion of residents with bachelor’s degrees in 1980 than did areas that are now struggling. Access to higher education is crucial. But his diagnosis is incomplete, and his determinism is unfounded. Struggling metro regions had, and still have, hundreds of thousands of residents with college degrees, more than enough to sustain vibrant creative industries. In the 1980s, for instance, St. Louis had booming advertising, pharmaceutical, and financial sectors, and even today is a hub of tech start-ups thanks in part to the presence of an elite research institution, Washington University in St. Louis. In their best-selling recent book Our Towns, journalists James and Deborah Fallows recount their travels to modest-sized cities like Duluth, Minnesota, and Sioux Falls, South Dakota, that are being remade thanks to a combination of civic activism and entrepreneurial energy.
There’s thus little reason why smaller-sized metro areas can’t succeed in the twenty-first-century economy. “Innovation,” after all, didn’t start being important in 1980; it’s something economies have depended on for centuries. To the extent that the digital age is different, it’s that innovative people can now connect and work remotely. If anything, today’s coders should have less need to all be in the same place than did educated professionals in the 1960s.
The likeliest explanation for the regional divergence, then, doesn’t come from economics or sociology. It comes from politics and policy. Between the mid-1930s and the mid-1970s—the height of America’s regional wealth convergence—elected officials worked to level the economic playing field through policies specifically designed to enhance regional and local competitiveness. Federal laws passed in the 1930s, for example, blocked the growth of domineering chain stores by cracking down on practices that would undercut smaller businesses. The federal government also made vigorous use of antitrust laws. In the mid-1950s, for instance, the Justice Department successfully sued to keep two shoe companies from merging. It argued that the resulting firm—which would have controlled just over 2 percent of the nation’s footwear market—could suppress competition and harm consumers. Today, the idea that such an entity might be monopolistic would be roundly dismissed by the courts. But in 1962, the Supreme Court unanimously sided with the Justice Department. In his opinion, Chief Justice Earl Warren wrote that the Court had to respect “Congress’ desire to promote competition through the protection of viable, small, locally owned business.”
In the mid-1960s, the twenty-five richest metropolitan areas included Milwaukee, Des Moines, and Cleveland. By 2018, twenty of the top twenty-five were on the East or West Coast. Minneapolis was the only one from the Midwest.
Yet in the latter half of the 1970s, just as regional equality was cresting, the government changed course. The process began under Jimmy Carter. In 1978, the president signed legislation that deregulated the airline industry by abolishing the Civil Aeronautics Board. For decades, the CAB had made sure that passengers flying to and from small and midsize cities paid a similar price per mile as passengers flying to and from the country’s largest ones. It required that airlines offer service to places even when such routes were unprofitable, to ensure that no city was left behind. Eliminating the CAB did reduce airfare costs in the nation’s biggest cities, at least initially. But its ultimate effect was the suffocation of many inland metro areas. Since the board’s demise, flights to interior cities have become far less frequent and far more expensive. In Memphis and Cincinnati, they’ve nearly doubled in price.
But regional inequality really took off in the 1980s, when both the Supreme Court and Ronald Reagan’s Department of Justice narrowed the definition of what was enforceable under federal antitrust laws and began approving an enormous number of corporate mergers. The single largest increase in corporate acquisitions in American history happened between 1984 and 1985. This laissez-faire attitude toward monopolies didn’t stop when Reagan left office, or even when Democrats won back the White House. In 1998, for example, Bill Clinton’s administration approved the merger of Exxon and Mobil, then the country’s two largest oil companies. The upshot of these policies is that large firms located in big, economically powerful cities have increasingly captured the market. They have bought out their heartland competitors in industries ranging from banking to retail. The result has been a one-way flow of wealth out of middle America and into elite metropolises.
Greater St. Louis is a prime example of how airline deregulation and the demise of antitrust laws can suck the vitality out of a prominent city. St. Louis was once home to a vibrant collection of internationally competitive corporations and—given its location at America’s center—was a transportation hub and business convention destination. But then it was hit with the by-products of pro-monopoly government policies. Locally headquartered Ozark Airlines was bought in 1986 by Trans World Airlines, which was then bought by Chicago-headquartered American Airlines in 2001, which then cut flights to St. Louis by more than half. In 1980, the area had twenty-two Fortune 500 companies. Today, there are nine. One of them, the health care firm Express Scripts, is in the process of being acquired by Cigna, a Fortune 500 health insurance company based in Connecticut.
When a city loses the headquarters of its major employers, the damage extends far beyond just the thousands of lost jobs. As regional firms are acquired, many local executives are replaced by managers with less incentive to engage with the community. The new parent company may make business decisions that undermine the subsidiary and its hometown. Executives may decide to relocate local staff, draining talent and resources from the area. After the Belgian-based beer conglomerate InBev bought St. Louis–based Anheuser-Busch, it promptly eliminated more than a fifth of the company’s St. Louis workforce. Even if local jobs aren’t eliminated, profits that once would have stayed in the region are now channeled elsewhere—functionally making these places economic colonies of distant super-cities.
The problem extends beyond the flight of existing capital. As markets become less open and more monopolized, it gets harder for new businesses to break through. While St. Louis boasts a fairly robust start-up scene, many of its biggest successes have been acquired by companies elsewhere, as when a Philadelphia company purchased St. Louis biotech start-up Confluence Life Sciences for $100 million in 2017. In the late 1970s and early 1980s, Gates and Allen could build Microsoft in Seattle—despite the city’s woes—because of a relatively equitable national economy. Today’s entrepreneurs don’t live in that reality. Instead, most eventually cash out by selling their projects to an existing monopoly.
Increasingly, experts and politicians seem aware that monopolization is a serious economic problem. It allows price gouging, forces low wages on an increasingly captive labor force, and redistributes wealth upward. But it’s also a political problem. There are fifty-three metro areas with one million or more residents, located in thirty-eight states. Together, they accounted for roughly 55 percent of votes cast nationwide in 2016. According to research by Patrick Adler, an associate at the Martin Prosperity Institute, Hillary Clinton won two-thirds of these metro areas, including a majority of those located away from the coasts. She won all metro areas with over one million residents by an average of twelve percentage points, over nine points greater than her national popular vote victory.
But the electoral power of America’s metropolises appears to be declining. Clinton became the first candidate in modern U.S. history to lose the presidency while winning counties where a majority of Americans live. Out of the country’s largest 100 counties, Clinton won eighty-eight, the same number that Obama took in his resounding 2008 victory, and eighteen more than Al Gore won in 2000. But because of the Electoral College, it wasn’t enough. Conservatives often complain that large liberal cities are too politically powerful. The truth is closer to the reverse: if politicians can win races while carrying only a small minority of America’s metropolitan areas, then the voices of urban and suburban voters—including in middle America—are ignored.
The most obvious driver of this trend is the intense rightward shift of white, rural voters. But the relative health of America’s metropolises may play an equally large, if barely appreciated, role. Consider the cases of Minnesota and Wisconsin. In addition to a border, the states share similar populations and demographics, shaped by a history of German and Scandinavian immigration. Until Scott Walker came along, they also had a shared tradition of progressive populism, stemming from Minnesota’s Democratic-Farmer-Labor Party and the legacy of Wisconsin’s Fighting Bob La Follette—who made breaking the “combined power of the private monopoly system over the political and economic life of the American people” one of his central tenets.
Federal policy changes have allowed large firms in coastal cities to buy out their heartland competitors in industries ranging from banking to retail. The result has been a one-way flow of wealth out of middle America and into elite metropolises.
In 2016, the rural parts of both states shifted sharply to the right, matching the national trend. Minnesota, however, stayed blue, while Wisconsin went red. To understand why, take a look at the growth rates of the states’ largest metro areas, both of which voted heavily for Clinton. Between 1970 and 2017, Greater Minneapolis grew at an annual rate of roughly 2 percent, above the national rate of 1.1 percent. The Minneapolis region—home to a variety of corporate giants like Target—now has roughly 3.6 million residents, up from 1.87 million in 1970. By contrast, Greater Milwaukee, buffeted by business closures and a shrinking middle class, grew at an annual rate of only 0.26 percent over the same period.
In Minnesota, Minneapolis’s growth was enough to offset Democratic losses in rural areas. In Wisconsin, Milwaukee’s wasn’t. If Greater Milwaukee had grown at the same rate as Greater Minneapolis, then Clinton would have carried Wisconsin by approximately 16,000 votes instead of losing by roughly 23,000.
The nearby states of Illinois and Michigan are also illustrative. The two states voted for the same presidential candidate in all but one election from 1952 through 2012 (1968 was the exception). But in 2016, Clinton’s vote share in Michigan dipped by seven points, enough to lose the state, while her more modest two-point decline in Illinois kept that state safely blue. Once again, big cities helped make the difference. Growth in Chicago is nothing to write home about, but unlike Greater Detroit, the area at least hasn’t lost residents over the last forty-seven years. As recently as 1990, Chicago and Detroit were the third and fifth largest metro areas in the country, respectively. By 2010, they were third and twelfth. Clinton won 2,381,476 votes in the Chicago metro area alone, more than Trump won in the entire state, powering her to victory. But her 169,025-vote margin in metro Detroit was less than a tenth of both her and Trump’s statewide total.
It isn’t just the upper Midwest. Virginia’s transformation from deep red to bright blue is largely the story of metropolitan Washington, D.C., which includes northern Virginia. The area has been a hotbed for high-quality economic opportunity over the last few decades, courtesy of both the federal government and the variety of major private companies that have sprung up around it. In 1970, northern Virginia accounted for only 12 percent of the state’s population. By 2010, one-third of state residents lived in the counties surrounding the District. This growth has been driven by highly educated professionals, including a rapidly growing Asian American population drawn to the region’s glut of high-tech jobs. This has been a godsend for Democrats, who dominate the area. Indeed, Virginia would not be blue otherwise. Hillary Clinton would have lost Virginia if northern Virginia’s Fairfax County alone had cast the same number of ballots as it did in 1972, even if the county had voted Democrat by the same margin.
In Minnesota, Minneapolis’s growth was enough to offset Democratic losses in rural areas. In Wisconsin, Milwaukee’s wasn’t. If Greater Milwaukee had grown at the same rate as Greater Minneapolis, then Clinton would have carried Wisconsin.
Contrast Virginia with Missouri, a similarly sized state that also sits just below the Mason-Dixon Line. Once America’s quintessential swing state (it voted for the winning presidential candidate in every election from 1904 to 2004), Missouri’s politics have lurched to the right as St. Louis, its largest city, has stagnated. From 1970 to 2017, the region’s annual growth rate was an anemic 0.26 percent, even less than the growth rate of Missouri as a whole.
To be sure, not all growing metro areas skew blue. Some, especially those with large energy industry and retirement sectors, vote red. But the pattern is clear: big cities help Democrats, and the bigger the city, the more help it provides. This makes sense demographically. Metro areas tend to be younger, more diverse, and have more college-educated voters than rural areas. But it isn’t just a matter of liberal-leaning demographics clustering in cities. Experts have also found that even traditionally conservative demographic groups are more likely to vote Democrat when they live in more densely populated places. A study by Catalist, a major progressive data research organization, shows that in 2018, the Democratic vote share among white voters without college degrees—also known as Trump’s base—was thirty-four points higher in suburbs and cities than in rural areas. Indeed, the average non-college-educated white person residing in a city voted Democratic. “Even if you look at white non-college voters, the closer you get to the city, they tend to be more Democratic,” said Ruy Teixeira, a sociologist and senior fellow at the Center for American Progress. “Maybe that’s partly because they’re used to living with people who are different from them, and that produces a certain kind of outlook that’s less Republican.”
Given these trends, it would seem obvious that liberals should be keenly interested in promoting policies that would equalize geographic opportunity in America. Yet what you tend to hear instead is smug satisfaction about the economic superiority of liberal big cities. “I win the coast, I win, you know, Illinois and Minnesota, places like that,” Hillary Clinton told an audience in Mumbai last March. “I won the places that represent two-thirds of America’s gross domestic product. So I won the places that are optimistic, diverse, dynamic, moving forward.”
Her comments, though no doubt borne of understandable frustration, were tone deaf and prompted an equally understandable online roast. But she also put into words what a whole lot of residents of major metropolitan areas think—and not just liberals. In a March 2016 essay in the National Review, conservative writer Kevin Williamson assailed Trump-supporting white working-class voters and the distressed areas in which they reside. “The truth about these dysfunctional, downscale communities is that they deserve to die,” he wrote. Their residents, he argued, “failed themselves.”
Williamson’s invective makes more sense, ideologically, than Clinton’s unscripted outburst. Letting a monopolized market pick winners and losers fits with modern right-wing economic dogma. Unfortunately, too many liberals have unconsciously bought into the same “free market” view when it comes to the divergent paths of metro areas. Writing in the New Republic in 2017, contributing editor Kevin Baker boasted that “cities now generate the vast majority of America’s wealth—the cities, that is, where blue folks live,” and half-seriously proposed that these nodes of pro-liberal wealth virtually secede from the union via radical federalism—“Bluexit,” he called it.
Liberals ought to reconsider taking such pride in the economic dominance of blue metro areas. It was Robert Bork, the archconservative legal scholar and failed Supreme Court nominee, who laid the intellectual groundwork for destroying antitrust regulations. It was Ronald Reagan who took Bork’s ideas and made them ascendant, channeling wealth to the coasts. Many Democratic politicians then adopted Bork and Reagan’s antitrust ideology, furthering the outward flow of wealth. In other words, thriving blue cities like San Francisco and New York owe much of their privileged status to decades of reactionary laissez-faire economic policy.
The bigger blind spot is that liberals seem relatively uninterested in the plight of heartland metro areas, and disproportionately preoccupied with what happens in cities in blue states. Arguments over whether the best way to fight gentrification in places like Boston and San Francisco is affordable housing or looser zoning requirements consume liberal policy communities. None of those questions are irrelevant or unimportant. But by dwelling endlessly on the problems facing the residents of elite coastal cities, they ignore a broader class of victims: the less-than-affluent people living everywhere else.
The fundamental problem in wealthy, high-cost cities is not zoning laws that are too restrictive or that don’t mandate enough affordable housing—even if those are real issues. It’s not that they have too many white-collar working professionals moving into once-affordable communities. It’s that they have too many white-collar working professionals, period. Stagnant heartland cities, on the other hand, don’t have enough.
But rather than seeing the connection between these two issues, many urbanists attempt to address each problem separately. For affluent cities, the emphasis is on alleviating cost-of-living concerns. For struggling cities, it’s on improving educational opportunities and getting more federal aid. A recent Brookings Institution report on the growth of regional inequality, for example, calls for “an urgent push to boost the tech skills of left-behind places.” It also proposes that the government provide funding for certain “promising heartland metros.” But without simultaneously tackling monopolization, this type of investment would be like trying to fill a bathtub with an open drain. Whatever resources and capital are added would just keep getting sucked out by firms on the coasts.
To its credit, the Brookings report does cite economic concentration as a cause of regional inequality. But its proposed solutions make no mention of monopolization, suggesting that the authors do not think antitrust enforcement is a viable remedy. That’s a shame, because cities have proven that they can turn themselves around when economic power isn’t overly concentrated, as Seattle once did. Big cities like St. Louis, Cleveland, and Detroit could do the same thing today if the playing field were even. They have cultural amenities, school systems as good as or better than those in elite coastal cities, and excellent nearby universities. They have a surplus of lovely, affordable homes, many in walkable urban neighborhoods—and most local residents would see an influx of affluent professionals not as evil gentrification but as a godsend. They have mass transit systems that they’ve expanded in recent years, mostly with local tax funding. They don’t need huge new sums of federal money to thrive economically, though it wouldn’t hurt. What they need are rules allowing them to compete fairly.
Liberals ought to reconsider taking such pride in the economic dominance of blue metro areas. Thriving blue cities like San Francisco and New York owe much of their privileged status to decades of reactionary laissez-faire economic policy.
The Republican Party’s current economic strategy—tax cuts and less regulation with tariffs on top—will not help heartland cities. It isn’t designed to. It’s therefore up to Democrats to advance policies that will distribute economic power and opportunity to parts of America beyond the coasts. That means, first and foremost, challenging monopolies head-on. The next Democratic administration needs to turn up the dial on antitrust enforcement, blocking proposed mergers like the Express Scripts–Cigna deal and breaking up giants that have already accrued too much market power. Watching major American cities fall over themselves wooing Amazon was nauseating, but given the company’s size, the prostration was understandable. It would be better if, instead of competing to have a part of Amazon, these metro areas were able to have their own successful online retailers. Creating that kind of economy means putting limits on Jeff Bezos’s empire.
It also means rewriting banking legislation to disperse financial power from the big coastal money centers and out to the rest of the country, as was the case until the recent era of deregulation. Local businesses can’t thrive without sources of financing, and study after study shows that local and regional banks—because of their rootedness and greater local knowledge—are more willing and able to make those loans than Citibank or Bank of America. In Detroit, for example, a consortium of nonprofits and regional banks are creating a program that will make it easier for prospective homeowners to get mortgages that enable them to both purchase and renovate houses. That’s an enormous step in a city where derelict properties deter homeownership and drive the price of real estate down. The federal government needs to strengthen and protect these kinds of institutions.
Helping smaller metro areas thrive also means giving them back the connectivity they once enjoyed. Airline deregulation has not only made flying a miserable experience for everyone, it also has jeopardized the viability of companies in places like Cincinnati, where it costs twice as much per mile to fly anywhere compared to New York or San Francisco. The policy elites in the 1970s who decided that regulating fares and routes was an intolerable burden didn’t foresee how much worse it would be when those decisions were made by hedge fund managers in New York, who own the four big carriers that have locked up the air passenger market.
Of course, boosting competition and growth in America’s metro areas won’t be enough on its own to solve the growing problem of geographic polarization. It must be in addition to, not in place of, an equally aggressive strategy aimed at rural America. As Claire Kelloway argues elsewhere in this issue, the same bag of antitrust and pro-competition tools would further that effort, too—if anything, rural areas are feeling the sting of monopoly even more acutely than heartland cities. But it’s essential to understand that America’s political geography isn’t just about urban versus rural. It’s also about coastal cities getting richer, more crowded, and more expensive while an overwhelming number of heartland metro areas get left behind.
Strengthening competition policy and breaking up monopolies requires a national solution. This creates something of a catch-22. To win in more places, Democrats may need to foster healthier heartland cities. But to foster healthier heartland cities, Democrats need to win in more places. Still, it’s imperative that the party do whatever it can as soon as it has the chance. That’s especially true because America’s economic landscape will not change overnight. New businesses take time to grow. Major companies and their executives will aggressively combat new limitations and fight breakups. But if history is any guide, fighting monopolization will prove well worth the effort. Doing so in the early 1900s led to a half century of economic growth that was shared by every region of the country.
Simply painting a vision for how America can restore that kind of broad-based growth, and the specific policies we’ll need to achieve it, could go a long way to helping Democrats win elections in the near term. But it’s the long term they need to worry about most. Despite repeated predictions that America’s increasing diversity will eventually build a wall around the GOP, Republicans’ willingness to double down on white rural voters, franchise restrictions, and gerrymandering—plus the “natural” advantage they accrue from the unrepresentative Senate and Electoral College—is continuing to pay dividends. Democrats need to make this template impossible for the GOP to keep following. And to do that, they need to vigorously enforce policies that make America’s purple and red state metro areas too big and too vibrant for Republicans to ignore or suppress.
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