Strong opinions, weakly held

The role of the federal government

What’s the role of the federal government? Here’s one answer, courtesy of Matt Yglesias:

One of the main things the federal government does is transfer resources from high-productivity urban areas to low-productivity rural ones.

In principle, I don’t have a huge problem with this. However, I do have a problem with the fact that the people in the more subsidized areas fail to understand that this is how things work, and indeed consider themselves to be exploited by the federal government rather than exploiting it.

Mainly, I just appreciated reading that sentence. I had never really thought of things that way.


  1. What struck me most about his post was that he apparently thinks this function of the federal government is a bad thing, which seems to me both wrong and inexplicably at odds with his general philosophy. It is frustrating to see the beneficiaries of this side-effect of federal spending patterns not understand what they’re getting out of the deal, but Matt’s position honestly makes even less sense.

  2. He’s pretty typically pro-urbanization, so it doesn’t surprise me that he’d see it as a bad thing.

  3. If this is one of the main things that federal government does, they do a poor job of it. 2000 post offices will be closed this year — most will likely be in rural areas. Extension of high-speed internet access to rural areas is woefully lacking. Rural communities’ downtowns are being shuttered. Their populations are in decline (http://goo.gl/obH4g).

    Maybe the problem is that rural Americans realize that despite whatever services they are receiving, their situation is deteriorating.

  4. I think that’s also true.

  5. The main thing the federal government does is transfer resources from high-productivity areas to low-productivity ones.

    I fixed the quote. To me the rural/urban distinction isn’t all that useful as rotted urban cores get a fair their share of government help.

  6. Agree with Jeff Price. Although it’s fairly criminal that we have a significant number of said rotted urban cores, because unlike rural areas, they actually have the potential to be extremely productive – concentrated population with high unemployment, existing transport infrastructure, existing physical plant that could sometimes still be used, high-capacity power and network connections close at hand… when you look at the most decrepit areas of Oakland you could just cry for thinking of the wasted potential there.

    Rural areas fundamentally do not have the same potential for productivity and growth unless they happen to be on top of significant natural resources. Farming is an ultra-high-productivity activity but it is also at or near capacity – and especially at employment capacity – in most rural areas. For virtually every other kind of economic activity cities are better.

  7. And of course the scandal of rotten urban cores is that they are in large part rotten because they are starved for resources that the government provides to other areas. So I don’t necessarily think that there’s this big transfer of resources from high productivity areas to low productivity urban areas.

  8. I would say that the largest part of why they are rotten is the near-total lack of employment opportunity. Oakland wasn’t rotten when the shipyards were still operating and when there was substantial manufacturing happening there.

    I do not believe that it is primarily a lack of resources, although the resources could be spent more effectively. It’s a lack of jobs. With jobs everything else can be fixed.

    And I should emphasize that the resource expenditures there are probably not much higher than the resources expended in the middle-class suburbs that we probably all live in. They become a net transfer only because the economic productivity of those areas is so low because of a lack of economic activity, not because the potential productivity is low.

    And they’re also expenditures in ways that are very wasteful, often because someone profits from that very wastefulness. Read this: http://www.newyorker.com/reporting/2011/01/24/110124fa_fact_gawande about high-cost patients at urban hospitals (often very broke people checking into the ER over and over) and you see both waste, and how those who profit from waste have no incentive to reduce it. Oftentimes it is the fact that someone is unemployed and uninsured that is at the hart of the problem. Similarly the costs of policing and emergency care for areas with high levels of violence represent a wasteful transfer, but with more jobs, young people – especially, of course, poor young black men, the group hit the very hardest by this unemployment problem – would have better things to do than hang out on the street getting in trouble.

    I don’t view this as a difficult problem to solve. It involves tariffs on manufactured goods sufficient to encourage some portion (not all) of manufacturing jobs to move back to the US. Contra neoliberal blather, it’s perfectly possible for a high-income society to produce all its own manufactured goods domestically paying people a decent wage. Germany is proof of it, and then some. You can’t do it when you have a free-trade agreement with an mercantilist economy, mind you.

  9. It’s a lack of jobs. With jobs everything else can be fixed.

    Too bad the government is too stupid/corrupt to do the FDR and invest in massive employment vis-a-vis public works projects. This would a) help our crumbling infrastructure, b) reduce our crippling under-/unemployment (despite what the “experts” say, it is closer to 20%) by directly employing the working class and c) pump needed $$$ into the economy.

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