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Why Some "Flyover States" Switched to Trump

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Tags Money and BanksU.S. EconomyU.S. HistoryMoney and Banking

11/11/2016

In recent articles and interviews, David Stockman has noted the divergence between economic indicators in large coastal urban centers, and those in the so-called Flyover States. The "flyover zone" constitutes those parts of the country outside the handful of major cities that benefit directly from the Fed's easy money policies and the ongoing financialization of the economy at the expense of ordinary "main street" industries. 

But just how big is this difference? Looking at median incomes can help expose some of the divergence. 

In the past, we have looked at median incomes in the United States overall and found that, by several different measures, that median incomes (both household and individual) are declining in the United States

But what about growth when measured on a state-by-state basis

When we do this, we do find some very real regional trends, not surprisingly. In the US overall, median houshold income fell 2.2 percent from 2000 to 2015. Meanwhile, while household incomes have been either flat or growing throughout most of the Northeast and the West Coast since 2000, it has been a very different story in the Deep South and the industrial Midwest. Measured for the period from 2000 to 20151:

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Outside the wealthy coastal areas, states with oil and gas wealth — at least as of 2015 — continued to see substantial gains in many cases. North Dakota, Texas, Wyoming, Louisiana, and even Arkansas, have noticeably benefited from the resource-extraction economy. 

Not surprisingly, the largest amount of income growth is found in Washington, DC with an increase of 23.5 percent from 2000 to 2015. Over the same period, oil-booming North Dakota came in a distant second place at 15.9 percent. Growth has been more ordinary in the Northeast, although solidly in the positive column, with gains of 5.5 percent in Massachusetts, 4 percent in Pennsylvania, and 5.6 percent in Connecticut. 

Other parts of the country fared less well. Nevada has still not recovered from the blow inflicted upon it by the housing bust and the turn away from low-skill service jobs in that region. Their median income fell 17.4 percent from 2000 to 2015. Mississippi, Kentucky, Michigan, Georgia, and Wisconsin all show median income declines of more than ten percent during the period. 

flyover2.png

Of course, none of this matters for a media and investors who only pay attention to data in the form of huge national aggregates. After all, the national data shows the economy is growing. So everything must be fine. 

For millions of people outside the coastal cities where powerful investors and media figures live, however, things are not fine. 

Indeed, no one should be surprised that on election day, it was voters from Ohio, Michigan, and Wisconsin — states that have favored Democrats in recent presidential elections — handed Donald Trump his victory. Even Minnesota, which reliably votes for Democratic presidents, was shockingly close, with Clinton winning by a less-than-two-percent margin. 

It remains to be seen if Trump will do anything to rein in the Fed and ease the ferocity of the wealth transfer from ordinary working class households to wealthy Wall Street investors. In any case, the past 15 years have been something of a lost "decade" for many in the flyover states. 

Ryan McMaken is the editor of Mises Wire and The Austrian. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre. Contact: email, twitter.

  • 1. State level median income data is from the Census Bureau: www.census.gov/data/tables/time-series/demo/income-poverty/historical-income-households.html

Ryan McMaken (@ryanmcmaken) is the editor of Mises Wire and The Austrian. Send him your article submissions, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
Image source: Ryan McMaken
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