{"id":985,"date":"2008-03-15T12:40:01","date_gmt":"2008-03-15T16:40:01","guid":{"rendered":"http:\/\/philip.greenspun.com\/blog\/2008\/03\/15\/scary-thought-maybe-the-rust-belt-is-th"},"modified":"2008-03-15T12:40:01","modified_gmt":"2008-03-15T16:40:01","slug":"scary-thought-maybe-the-rust-belt-is-the-whole-us-now","status":"publish","type":"post","link":"https:\/\/philip.greenspun.com\/blog\/2008\/03\/15\/scary-thought-maybe-the-rust-belt-is-the-whole-us-now\/","title":{"rendered":"Scary thought:  Maybe the Rust Belt is the whole U.S. now?"},"content":{"rendered":"<p>Recession is upon us, economists seem to agree, and now we need only discuss how to get out of it.\u00a0 One popular solution is to cut interest rates and print money.\u00a0 That has worked in the past for most of the U.S., but it did not work for Rust Belt states and cities such as Michigan, Cleveland, and Buffalo.\u00a0 The Rust Belt was unattractive to new business investment due to its high labor costs, high taxes (many of which were necessary to pay for commitments made decades earlier, either bonds or pensions for public employee unions), and inner-city crime (Detroit).\u00a0 Companies did invest the newly printed money, but they invested it in other regions of the U.S.<\/p>\n<p>The Federal Reserve Bank is cutting interest rates, printing money, and ladling out the public&#8217;s cash to mortage speculators.\u00a0 When folks get their hands on this money, will they invest it in things that will cause the U.S. GDP to grow in the long run?\u00a0 Consumers will buy stuff, presumably manufactured items made in China or oil from Venezuela and the Middle East.\u00a0 Companies will invest some of the money, but presumably where they think it is most efficient to invest.\u00a0 In the old days, U.S. companies nearly always invested somewhere in the U.S.\u00a0 China was closed to foreign investment.\u00a0 India was tangled in bureaucracy and regulations.\u00a0 South America was unstable politically.<\/p>\n<p>How does the U.S. stack up right now as a place to invest?\u00a0 Our workers are expensive because the cost of living here is high and their taxes need to be high enough to pay for a lavish government sector and an Iraq adventure that Joseph Stiglitz estimates will cost $3 trillion, a sizable fraction of our annual $14 trillion GDP.\u00a0 Our college graduates are roughly equivalent in ability to other nations&#8217; high school graduates (<a href=\"http:\/\/kapio.kcc.hawaii.edu\/upload\/fullnews.php?id=52\">story<\/a>) and a lot of our high school graduates could not compete on the world market for any jobs other than manual labor.\u00a0 Our transportation system is comprehensive, but traffic jams can take an hour or more out of a worker&#8217;s day.\u00a0 Unlike other countries, we have no plans to implement congestion pricing.\u00a0 In communications, we lag countries such as South Korea in broadband speed and percentage of households connected; we lag all of Europe and most of Asia in mobile phone coverage.\u00a0 Our consumer market is huge, but it is also brutally competitive and most consumers have all of the stuff that they need; emerging middle classes in India, China, and Arab countries represent more of a profit opportunity.<\/p>\n<p>If we handed out $500 billion right now to U.S. businesses and told them to invest it, how much of that investment would happen here in the U.S.?<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Recession is upon us, economists seem to agree, and now we need only discuss how to get out of it.\u00a0 One popular solution is to cut interest rates [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-985","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Scary thought: Maybe the Rust Belt is the whole U.S. now? - Philip Greenspun\u2019s Weblog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/philip.greenspun.com\/blog\/2008\/03\/15\/scary-thought-maybe-the-rust-belt-is-the-whole-us-now\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Scary thought: Maybe the Rust Belt is the whole U.S. now? - Philip Greenspun\u2019s Weblog\" \/>\n<meta property=\"og:description\" content=\"Recession is upon us, economists seem to agree, and now we need only discuss how to get out of it.\u00a0 One popular solution is to cut interest rates [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/philip.greenspun.com\/blog\/2008\/03\/15\/scary-thought-maybe-the-rust-belt-is-the-whole-us-now\/\" \/>\n<meta property=\"og:site_name\" content=\"Philip Greenspun\u2019s Weblog\" \/>\n<meta property=\"article:published_time\" content=\"2008-03-15T16:40:01+00:00\" \/>\n<meta name=\"author\" content=\"philg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"philg\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/philip.greenspun.com\/blog\/2008\/03\/15\/scary-thought-maybe-the-rust-belt-is-the-whole-us-now\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/philip.greenspun.com\/blog\/2008\/03\/15\/scary-thought-maybe-the-rust-belt-is-the-whole-us-now\/\"},\"author\":{\"name\":\"philg\",\"@id\":\"https:\/\/philip.greenspun.com\/blog\/#\/schema\/person\/448e4e6a0ae9105741a06dcf62cee50e\"},\"headline\":\"Scary thought: Maybe the Rust Belt is the whole U.S. now?\",\"datePublished\":\"2008-03-15T16:40:01+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/philip.greenspun.com\/blog\/2008\/03\/15\/scary-thought-maybe-the-rust-belt-is-the-whole-us-now\/\"},\"wordCount\":469,\"commentCount\":10,\"publisher\":{\"@id\":\"https:\/\/philip.greenspun.com\/blog\/#\/schema\/person\/448e4e6a0ae9105741a06dcf62cee50e\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/philip.greenspun.com\/blog\/2008\/03\/15\/scary-thought-maybe-the-rust-belt-is-the-whole-us-now\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/philip.greenspun.com\/blog\/2008\/03\/15\/scary-thought-maybe-the-rust-belt-is-the-whole-us-now\/\",\"url\":\"https:\/\/philip.greenspun.com\/blog\/2008\/03\/15\/scary-thought-maybe-the-rust-belt-is-the-whole-us-now\/\",\"name\":\"Scary thought: Maybe the Rust Belt is the whole U.S. now? 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