A Tale of Blue Cities.

AuthorBlock, Daniel
PositionCover story


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.

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 noncoastal 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...

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