It's the Economy! (Stupid)

"A universally helpful and insightful book. I particularly liked the straightforward charts and summary points. It should be a reference manual for everyone interested in the US economy."

David Gamble
Former Chief Executive
British Airways Pension
Investment Management Ltd

(excerpt from the book...)

The US economy is more than the private sector and the Federal government, of course. Most Americans regard the Federal government as the ultimate political power in the land, but we all really live in the 50 states or the District of Columbia (except the 4 million living overseas). Consequently, our perspective in our day-to-day lives for the most part is local and state, not federal and international. But since we all live in one state as our principle residence, chances are we don't know too much about the rest of the other states with respect to their economies, how large they are, and how they compare to each other. You might know something about what's happening in a neighboring state if you live in places like New England, but chances are if you live in Texas, California, or Alaska you have no clue as to what's happening in other parts of the same state let alone neighboring states. Similarly, those on the coasts of America probably have little in common with or knowledge of those who populate the big middle of America. If you live on the coast, for example, how amazed are you whenever you meet someone from the Great Plains who has never seen the ocean before; or the last time a coastal dweller has seen corn-fields going on and on for miles?

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In 1981, a book called "The Nine Nations of North America," written by Joel Garreau, divided North America into nine separate regions, (or "nations" as he called them), based upon socio-economic commonalities (see map on next page). Garreau identified different parts of North America in terms readily identifiable for most: Hence the Great Plains is referred to as the "Breadbasket Nation"; the South as "Dixie"; southern Texas, New Mexico, and Arizona are merged with Mexico to form "Mexamerica", etc. While doing this goes decidedly against most Americans' political sensitivities, from a socio-economic perspective of how Americans work and are integrated with their neighbors it is too close to being correct to ignore. Naturally when North America is put into this perspective, issues on trade under NAFTA, for instance, become more readily understandable to almost everyone.

We are defined as a nation because of our common history and the political development that stemmed from that history. But as far as our daily lives are concerned, they are ruled by the invisible--and more and more by the very visible--hand of economics. Americans living in the Great Plains, for instance, have more in common with Canadians north of the border than they do with Californians or those who live on the East coast since their lives and livelihood are commonly connected more to corn, wheat, and soy prices than stock markets or commuting problems.

So it's appropriate in this chapter to make you all aware of your fellow Americans in the other states and how you compare to each other from an economic perspective. The tables on page 140 and on the facing page rank the states based first on GSP (Gross State Product - the state equivalent to GDP for countries) and then per capita income--the same criteria as we began the book when putting the USA in perspective with the rest of the world. As you can readily see, although Thomas Jefferson in the Declaration of Independence may have stated that "all men are created equal", we know, however, that's not how we are likely to live out our economic lives. Indeed, as the table on the facing page shows, the per capita of people living within the 50 states varies greatly from a low of $24,062 in Mississippi to a high of $59,228 in Delaware--a variance of over 145%!

(...more in the book)