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I had an interesting experience last week while driving to Colgate University to give a book talk. Colgate, a small liberal arts institution, is located about five hours from New York City in upstate New York.
Before I tell the story, I need to offer some context. New York, like many large states with dense urban areas and large tracts of rural land, is basically two separate states. There is New York and its surrounding areas, which are rich and Democratic. Then there’s the rest of the state, much of which is Republican. Upstate areas, in particular, tend to be conservative, despite flashes of blue in college towns. Indeed, upstate New York reached its economic peak during the 19th century, when the Erie Canal was a major supply chain route and wealthy New Yorkers who could not yet travel flying to more exotic locations vacationed in the Catskill and Adirondack Mountains.
Today, the large companies born in the region during the second industrial revolution – groups like General Electric, IBM, Kodak and Xerox – have relocated most of their activities. The shift to road and air transportation, as well as deindustrialization and outsourcing, have depopulated and economically decimated the region.
That’s one of the main reasons why the Biden administration has targeted it for fiscal stimulus in sectors such as semiconductors. The president campaigned on a promise to invest in forgotten areas, the kind of places where angry white men voted for Donald Trump in the last two elections. Some data released Tuesday by the Brookings Institution will show just how successful this investment campaign has been (see the numbers when the link goes live tomorrow, here. The One Chips Act project involves Micron, a major semiconductor company , which announced a $20 billion investment in upstate New York, which will reach $100 billion over the next two decades.
It’s exactly the kind of project I imagined my driver, a licensed engineer who now runs a taxi company, would love. But to my surprise, he had nothing positive to say about the plan or the territorial economic strategies pursued by the White House. “It’s all going to be a big waste,” he said, pointing out that the company choosing the wrong location would put too much strain on local water systems (an interesting point to make for a conservative), and just about every other complaint. you could imagine. This despite the 50,000 jobs that would be created. “Democrats are throwing money out the window. »
Listening to his perspective, I asked him what he thought Trump would do for the region if elected. He gave no details, but simply said: “People here just don’t like being lied to.” At that moment, I realized that we were not having a political conversation, but an emotional conversation. While this is not particularly surprising, it is interesting to note that, quantitatively, this has become an increasingly common phenomenon in politics over the past 20 years, particularly during times of economic recovery. As this Stanford/NYU study on the growing partisan divide in economic perceptions shows, the gap in economic perceptions between Democrats and Republicans roughly doubled between 1999 and 2020, with recoveries tending to be the most polarized period.
The authors speculate that this could be because recovery periods tend to be characterized by mixed data, as the business cycle evolves. But, as Financial Times Washington bureau chief James Politi, the FT’s Marc Filippino and I discuss in the latest episode of the Swamp Notes podcast, the current economic data is pretty much all good. And yet the divide persists.
I believe this trend will manifest itself in the already partisan divide between how Democrats and Republicans respond to the new Justice Department report that exonerates the president of any records mishandling but also raises concerns about his memory and age. Peter, I’ll end this note with a big question for you: Will the Democrats change direction and replace Biden? Or will they double down?
Beyond the partisan cognitive divide, why are Americans so unhappy with a strong economy? This intelligent front-page article from the Wall Street Journal examines how the growing cost of the middle class, coupled with endemic feelings of insecurity in the job market despite today’s strong employment numbers, have led to lingering distrust with regard to the long-term state. economy.
Cornell colleague Cara Eckholm channels Jane Jacobs in this New York Times op-ed, which argues for new zoning laws to reinvigorate the city post-Covid. I couldn’t agree more. We could do a lot to immediately solve the housing crisis if we made it easier for single-family homeowners to rent space in their properties and if we changed the laws for small landlords versus large institutional landlords.
I completely agree with this FT article by Zainab Usman who argues that the US should have good trade relations with Africa. In particular, it emphasizes the possibility of obtaining rare earth minerals and other products in exchange for transfers of technology and know-how from the developed world.
And my colleague Tej Parikh is right: we have become far too obsessed with monetary policy. It’s so true. It sometimes seems like there are as many games and discussions online about every move by the Federal Reserve as there are about professional sports.
Peter Spiegel responds
Rana, as you probably remember, we argued over this issue when I replaced Ed Luce here in the Swamp in September. It was the last time the Democratic gossip mill was filled with angst over whether Biden should drop out of college due to his advanced age. What I believed then – and I believe now – is that the entire debate misunderstands Biden as a politician.
During his presidency – in fact, since he was chosen as Barack Obama’s vice president in 2008 – Biden has projected the image of an avuncular old uncle, and the public has largely bought into that image. But this benevolent aspect masks a fiercely competitive politician who has a big chip on his shoulder for being a working-class Joe (literally), educated at ordinary universities, in an American capital dominated by Ivy Leaguers who checked all the boxes. good career positions (internships in Washington, scholarships, gofer-ships) to access positions of power.
In the view of many in Bidenworld, this “chipiness” has been around for a long time, but reached its apotheosis during the Obama administration, when much of Obama’s team (and, by some accounts, Obama (himself) belittled Biden and his aides because of their perceived lack of intellectual qualifications. In order to show the Obamas that he is as good or even better a president, Biden needs two terms. This is what has long motivated him as a person and a politician, so even with the latest embarrassment, I find it very doubtful that he will withdraw from the race.
You ask, Rana, if the Democrats will change direction and replace him. The problem is that Democrats have no choice in the matter. The nature of the primary system means Biden has the nomination almost sewn up — even though we are several months away from the Democratic National Convention. As our friend and colleague James Politi pointed out this weekend, if Biden does not step down, it is almost impossible to replace him. It would take a massive revolt among Biden’s convention delegates to happen.
Biden is not going anywhere voluntarily. This means that Democrats will have to accept and support the president, regardless of any misgivings they may have privately.
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