Tuesday, March 19, 2019

What to do about Rural America?

Paul Krugman is pessimistic about reviving the economy of rural America:
Reviving declining regions is really hard. Many countries have tried, but it’s difficult to find any convincing success stories. Southern Italy remains backward after generations of effort. Despite vast sums spent on reconstruction, the former East Germany is still depressed three decades after the fall of the Berlin Wall. . . .

So what can be done to help rural America? We can and should make sure that all Americans have good health care, access to good education, and so on wherever they live. We can try to promote economic development in lagging regions with public investment, employment subsidies and, possibly, job guarantees.

But as I said, experience abroad isn’t encouraging. West Germany invested $1.7 trillion in an attempt to revive the former East Germany — more than $100,000 per capita — yet the region is still lagging, with many young people leaving.
Not to mention that decline, absolute or relative, makes people bitter and angry:
Nor, realistically, can we expect aid to produce a political turnaround. Despite all that aid, in 2017 more than a quarter of East German men cast their ballots for the extreme-right, white nationalist Alternative for Germany.
Our ability to control the world is limited. That's no reason to give up trying, but sometimes there just isn't much we can do to alter the course of events driven by fundamental economic and social change.

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