Forget Red And Blue States: Different Parts Of The Country Are Experiencing Dramatically Different Recoveries

richard green

Photo: Richard K. Green, Ph.D/University of Southern California

After the election, some commentators relaunched the argument over whether America has experienced a permanent blue state/red state split.Richard K. Green, a professor of public policy at the University of Southern California and the director and chair of the school’s Lusk centre for Real Estate, argues the real dichotomy is between states and cities that have recovered economically, and those that remain mired in financial and economic distress.

He recently made his case in a presentation to an alumni group. With his permission, we’ve reproduced it here.

Let's begin

The employment-population ratio — the number of folks in the labour force compared with the overall population — has plummeted

Employment growth remains anemic

We see an extremely lumpy recovery, where some states are gaining in low-skilled jobs

While others (though many fewer) are gaining in higher-skilled ones

Business services job growth is the one area that remains weak nationwide

Health and education employment growth payrolls are concentrated in the North

While Northeast manufacturing has declined

Financial services growth appears to be following population trends in the Sunbelt

There remain yawning geographic disparities in education

Meanwhile, housing starts have picked up slightly

And home prices remain extremely low, especially compared to prices around the world

The No. 1 question for the U.S....

The answer to which is: Depends on the city. Vegas, Detroit and DC tell three different stories

There's a cutoff after Rhode Island for what would constitute an ongoing crisis

But even in those troubled states, a rebound is likely imminent, for a couple reasons

However, the switch from ownership to rental is already underway

Fannie and Freddie should be targeting the most troubled states

There's a good case to be made for fully privatizing Fannie and Freddie, the most obvious reason being to fully eliminate moral hazard

But this would have to be done gradually

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