Recent comments from Hillary Clinton praising American “places that are optimistic, diverse, dynamic, moving forward” leads to this comparison between “trickle-down” and “stagnant” Americas:
Over the past 40 or so years, the U.S. has been fragmenting into two parallel societies, which I’ll call Trickle-Down America and Stagnant America. Each one looks upon the other with suspicion and hostility. Trickle-Down America is the America of our biggest metropolitan areas, and it is defined by comparatively high levels of density, diversity, and economic inequality. Importantly, the richest people in Trickle-Down America are typically white, while the service-sector workers who enable them to work longer hours are disproportionately brown and black. Stagnant America can be found in rural regions, small cities and towns, and outer suburbs across the country. This America is largely white and relatively equal, though it too is scarred by poverty, particularly among Hispanics and blacks. America’s most and least educated workers are concentrated in Trickle-Down America, while Stagnant America is home to most of America’s working- and middle-class white voters.
Is Trickle-Down America morally superior to Stagnant America? A good starting point is to reflect on the sources of Trickle-Down America’s wealth. In New York City, my hometown, the local economy has long been dominated by the financial-services sector, which has grown mightily in recent decades. Has the financialization of the U.S. economy been an unadulterated good for the country as a whole? There are many thoughtful people who’d argue otherwise. Indeed, some argue that rents flowing to the financial sector have badly distorted the U.S. economy, and have contributed to the devastation of tradeable sector employment in Stagnant America. Corporations headquartered in America’s cosmopolitan cities have profited immensely from the emergence of a globalized division of labor. Yet many of these same multinationals have pioneered tax-avoidance strategies that have made it harder for the federal government to compensate those who’ve lost out with globalization, all while deploying their considerable influence to get the U.S. government to pressure other countries to adopt intellectual-property protections that serve their interests. And then there is the federal government itself, and its vast, growing army of private administrative proxies—contractors, non-profits dependent on public subsidies, and the like—that has helped make Washington, D.C., and its environs one of the country’s most affluent and educated regions. It’s hard to disentangle exactly how much of Trickle-Down America’s success relative to Stagnant America is a product of straightforward rent-seeking. I certainly doubt that it accounts for all of it, or even most. But surely it accounts for some, and that should give Trickle-Down America’s champions pause.
One important thing to keep in mind is that Trickle-Down America is, overall, characterized by more stringent land-use limits than Stagnant America. These limits have raised housing costs in affluent coastal regions, which has redounded to the benefit of incumbent homeowners. Yet high housing costs have deterred inward domestic migration while driving out large numbers of working-and middle-class residents…
For now, though, Trickle-Down America’s affluent professionals find themselves in a sweet spot, which surely accounts for some of Clinton’s triumphalism. The food is better. Beautiful old houses are being renovated everywhere you turn. An abundance of low-wage immigrant labor adds diversity and dynamism to cosmopolitan cities, yet the noncitizen working class isn’t in a position to press for a more egalitarian social order—one that could prove discomfiting for local elites. Best of all, opposition to Trump is helping to obscure simmering discontent over Trickle-Down America’s business model.
What makes this suburban inequality more interesting for the realm of politics is how is affects voting: areas generally closer to the big city or with demographics more like the big city vote Democrat and wealthier communities and areas further out in regions vote Republicans. Will these same sort of voting cleavages arise in rural areas in cities as various inequalities receive more attention?