POLITICS

Red state victory: Energy-rich, pro-business states key to recovery

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Politics,Beltway Confidential,Michal Conger

California, step aside. The fastest-growing areas in the country aren’t trendy, left-leaning coastal states, but primarily conservative-leaning heartland states that have embraced pro-business policies to spark their economy.

There are four “growth corridors” where a strong business climate, low housing costs, and above-average population growth have created an attractive place to live and do business, according to a new study by the Manhattan Institute.  Those are the Great Plains, the Intermountain West, the Third Coast (spanning the Gulf states from Texas to Florida), and the Southeastern industrial belt. (Read the complete study in the embedded viewer below this post.)

The states in each of these corridors tend to be conservative-leaning, business-friendly and have a lower tax burden than their struggling neighbors.

“Perhaps the biggest advantage that the corridors have today is their business climate,” wrote Joel Kotkin, the study’s author. “Often historically poor, many of these areas have stayed hungry: they continue to seek out ways to expand incomes and opportunities for their residents.”

Energy policies have also played a huge role in these states’ growth, especially an openness to using fossil fuel-based oil and natural gas.  An example of how well these policies work is the widening gap between California and North Dakota, which are both rich in natural resources. But while California lags, North Dakota is thriving.

“California, for example, is a vast state with enormous fossil-fuel resources but chooses, in the name of environmental protection, to govern itself as if land and energy supplies were severely constrained,” Kotkin wrote. “As a result, North Dakota recently passed California as the nation’s third-largest energy producer, a development that would have been inconceivable a decade ago.”

Other traits these growing states share are low housing costs and above-average population growth.

States in these growth corridors were ranked in 11 of the top 15 spots in Chief Executive magazine’s 2012 review of best business climates. By contrast, California, New York, Illinois and Massachusetts were at the bottom of that list.

Some of these fast-growing states are even taking over in the tech world. According to the Manhattan Institute, Raleigh, Austin, Denver and Salt Lake City have all become high-tech hubs.

“The corridors’ growing success is a testament to the resiliency and adaptability of the American economy,” Kotkin wrote in today’s Wall Street Journal. “It also challenges the established coastal states and cities to reconsider their current high-tax, high-regulation climates if they would like to join the growth party.”

America's Growth Corridors: The Key to National Revival

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