A recent study by personal finance site WalletHub analyzing the best state economies should be encouraging news for liberals.
The study looked at economic activity, economic health, and innovation potential. An ideal economy should have a high GDP, low unemployment and growth in new business fields among a host of other economic factors.
So how did conservative and liberal states compare? Well, out of the top 10 states, seven could be viewed as strong liberal states, with Washington, California, and Massachusetts all near the top. There were also two conservative states, Utah and Texas, along with the moderate Colorado.
Now, to just say “liberal economic policies good, conservative economic policies bad” is simplistic. After all, Utah was the top state in the nation. But while it may be too easy to say that liberal economic policies will definitely lead to prosperity, we can say that contrary to conservative expectations, they do not lead to ruin.
Look at California. For years, conservatives have talked about how California regulations and taxation would drag the state down. They laughed at the high-tax, high-spending regime in Sacramento, but that has not caused Silicon Valley to leave. In fact, California’s GDP has risen to $2.3 trillion, which is higher than Brazil’s GDP of $2.2 trillion. If California became its own country, it would be the seventh-largest economy in the world. It has been the site of a tech boom that has transformed mobile software, with new apps like Showbox taking the market by storm.
Meanwhile in Washington, Amazon is on track to potentially be the most dominant company in the world. A recent analyst firm stated that its stock could hit $930 in the next 12 months, bolstered by the high profits created by Amazon Web Services.
The fact is that in order to create an innovative society, you need intelligent people willing to change things. In order to create intelligent people, you need a strong educational system which can teach children how to create a better tomorrow. You need a safety net to ensure that everyone can reach their full capacity and not be stuck eking out a living. And you need regulations to ensure all businesses are on an even playing field.
Perhaps there are things which more liberal states could take away from Utah. Utah’s strength appears to have come off the backs of small businesses as opposed to large corporations. This has created a diversified economy which can withstand hits to any one sector, and helps keep competition and wages up.
But it should be noted that Utah’s growth has come partly because the state has made investments into its citizens’ futures. Utah has implemented construction jobs such as a new light rail system and reconstructed the I-15 highway. It also does not hesitate to spend money on research and development, knowing that science and technology is the key to innovation in the global economy.
The bottom line is that a strong economy requires a strong, if not overbearing government. And as we watch states with effective governments thrive, other states should take note. Only with careful management can a society improve its ability to innovate and keep its citizens productive and satisfied.