There is an interesting article in the 2/11/08 issue of The American Conservative, entitled "Value Voters: The best indicator of whether a state will swing Red or Blue? The cost of buying a home and raising a family." Steve Sailer posits that
Neither Jane Austen nor Benjamin Franklin, however, would have found the question of what drives the Red-Blue divide so baffling. Unlike today’s intellectuals, they both thought intensely about the web linking wealth, property, marriage, and children. They would not have been surprised that a state’s voting proclivities are now dominated by the relative presence or absence of affordable family formation. ...
Remarkably, a half-century before Malthus’s gloomy and Austen’s witty reflections on life and love in crowded England, Ben Franklin had pointed out that in his lightly populated America, the human condition was more relaxed and happy. In his insightful 1751 essay, “Observations concerning The Increase of Mankind,” Franklin spelled out, with an 18th-century surfeit of capitalization, the first, nonpartisan half of the theory of affordable family formation: “For People increase in Proportion to the Number of Marriages, and that is greater in Proportion to the Ease and Convenience of supporting a Family. When Families can be easily supported, more Persons marry, and earlier in Life.”
He outlined the virtuous cycle connecting the colonies’ limited population, low land prices, high wages, early marriage, and abundant children: “Europe is generally full settled with Husbandmen, Manufacturers, &c. and therefore cannot now much increase in People. … Land being thus plenty in America, and so cheap as that a labouring Man, that understands Husbandry, can in a short Time save Money enough to purchase a Piece of new Land sufficient for a Plantation, whereon he may subsist a Family; such are not afraid to marry…” Franklin concluded, “Hence Marriages in America are more general, and more generally early, than in Europe.”
Sailer lays out four gaps
Four interlocking reasons explain why the affordability of family formation paints the electoral map red or blue.
First is the Dirt Gap ...
The second major factor in the Red-Blue divide is the Mortgage Gap. ...
The Mortgage Gap leads, in turn, to a third factor: the Marriage Gap. ...
That leads to the fourth and final factor: the Baby Gap. ...
He concludes,
This theory suggests that, in order to encourage marriage and children among voters, Republicans should pursue policies that raise wages, lower demand for houses, and keep the public schools from eroding further. The most obvious way to move the country toward a more Republican future is to restrict immigration. This revamped GOP could then position itself as the party of more weddings and more babies, while describing the Democrats, with some accuracy, as the party of dying alone.
Sailer sees the landscape, but I don't think he sees the cat.
A bit more from his article:
First is the Dirt Gap: Republican regions simply have more acres of land per person. Even excluding Alaska, counties that voted for Bush are only one-fourth as densely populated on average as Kerry’s counties. Blue State metropolises, such as Boston, Seattle, and Chicago, are mostly located on oceans or Great Lakes, so their suburban expansion is permanently limited to their landward sides. (That’s why Chicago has a West Side but not an East Side.) In contrast, Red State metropolises (such as Atlanta, Phoenix, and San Antonio) are mostly inland. They tend to be surrounded by dirt, not water, allowing their suburbs to spread out over virtually 360 degrees. The supply of suburban land available for development is larger in Red State cities, so the price is lower.
To demonstrate this, consider the 53 percent of the nation’s population who live in the 50 largest metropolitan areas. Among these folks, 73 percent of the Blue Staters live in metropolises bounded by deep water, compared to only 19 percent of the Red Staters.
The second major factor in the Red-Blue divide is the Mortgage Gap. As the law of supply and demand dictates, the limited availability of suburban dirt in most Blue States means housing generally costs more.
This has a striking political corollary. According to ACCRA, Bush carried the 20 states that have the cheapest housing costs, while Kerry won the nine states that are most expensive. The states with the lowest-cost housing are Mississippi (where Bush won an extraordinary 85 percent of the white vote), Arkansas (home state of Bill Clinton but now solidly Republican) and the GOP’s anchor state of Texas.
In recent years, the most expensive state for housing has been California. Although GOP presidential candidates carried California nine out of ten times from 1952 to 1988, they have not come close in the four elections since. Next most expensive are Hawaii and the District of Columbia (where Bush won only 9 percent). ....
Moreover, the Mortgage Gap has been growing. Bush was victorious in the 26 states with the least home-price inflation since 1980, while Kerry triumphed in the 14 states with the most. Home prices rose fastest in Kerry’s Massachusetts (515 percent) and second slowest in Bush’s Texas (89 percent), trailing only nearby Oklahoma. The correlation between low housing inflation and Bush’s share of the vote was strong, with a correlation coefficient, or “r,” of 0.72.
A rule of thumb in the social sciences is that correlation coefficients of 0.2 are low, 0.4 moderate, and 0.6 high. Thus 0.72 is quite high, especially given the complexity of voting patterns.
Housing price inflation. What is housing price inflation? Popular talk, and even most economists writing on the topic, seem to take as a given that houses can appreciate. Houses don't appreciate (unless either the materials or the labor to build them are completely unavailable, neither of which is the case). Houses, like cars and machinery, depreciate, even with good maintenance. A Federal Reserve Board study pegs that depreciation at 1.5% per year. What appreciates is the land, the site. (Where land is scarce, obsolete buildings get torn down to make way for newer ones; where land is not scarce, those who seek new homes simply commute a bit further, causing small towns to sprawl.) An $800,000 house in California looks pretty much like a $250,000 house in most parts of Texas. The house itself might be worth about $150,000, but the lot on which it sits varies -- $100,000 in Texas, $650,000 in California.
California has among the lowest homeownership rates in the US (4th lowest, I seem to recall). But its seniors actually have a homeownership rate which exceeds that of the remainder of the US. Is this good for California as a whole? It is certainly a good thing for one group: the someday heirs of those homeowning seniors. They own a very valuable asset -- and if they've owned it for any length of time, they pay a minuscule property tax on it, due to a 30 year old voter initiative called Proposition 13. Has it been good for California and most Californians? No. Has it been very very good to this cohort of landholders? Yes.
The difference which Steve Sailer is missing is best described by Mason Gaffney in a piece he wrote shortly after the 2004 election, called The Red and the Blue.
If Steve Sailer is really interested in creating the conditions for Affordable Family Formation, I have three words for him: Land. Value. Taxation.
The problems Sailer describes -- expensive dirt, wages that won't support a mortgage, reluctance to marry in the face of that (and the inability to sustain a marriage in the face of the problems expensive dirt and low wages cause) and fewer children -- could all be alleviated by the enactment of one simple -- and very conservative -- reform. It is a reform with both fiscal and social implications which all people of good will ought to know about.
The reform to which I refer is to collect for the community the economic value of land -- the $100,000 in Texas, the $650,000 in California, varying amounts elsewhere -- through an annual tax based strictly on land value -- and, in the process, to radically scale back the other taxes we place on wages, sales, buildings, etc.
Why do I call this form of taxation conservative? It conserves for the commons that which the community creates, and conserves for the worker that which he or she creates, and conserves for the capitalist that which he or she creates.
This leaves to the worker his full wages. But it also does some other good things for the worker. Because it lights a fire under the fellow (be that "fellow" an individual, a family trust, a real estate investment trust, a pension fund, an insurance company, a corporation, a hedge fund, a university endowment, whatever ...) who owns underused land in choice locations -- nudging him to put vacant land to use, to put underused land to better use, it creates both jobs in the redevelopment process and, long-term, the residences -- close to the center of activity, not way out on the fringe requiring a long daily commute -- and the venues for commercial activity -- retail, industrial, entertainment, professional, services, office, whatever -- to take place where it can serve -- and be served by -- people from a 360 degree radius, who provide the foot traffic that makes the difference between success and failure for many kinds of business -- employees, customers and suppliers. A dynamic job market drives wages up, with jobs chasing workers, instead of too many workers chasing wages downward in a constricted job market. And the dynamic marketplace provides consumers multiple suppliers to patronize, all competing for their business, keeping prices low.
Who loses? As best I can tell, the only loser in this scenario is the land speculator. But he wasn't making any contribution anyway. Who wins? Anyone who has his labor -- brain or braun -- to offer. People who don't want to work 2 jobs each just to pay their mortgage. People who would like for one parent to have the option to stay home with young children, if that works better for the family. People who have college loans to pay off. People who want wages high enough that they can save something toward retirement. People who want good schools for their children without paying all their income to live in a well-regarded school district. People who would like to open their own business.
Taxing land value has an interesting benefit: it lowers the price of land. (It doesn't reduce its value by a penny; but by lowering the price of land, that land becomes affordable; instead of paying the seller for it (and he didn't create its value), one pays one's community on the basis of its value, year by year -- and then doesn't owe other taxes. So one pays once instead of twice. There seems to be a rule of thumb that, whatever amount a builder pays for a piece of land, he plans a house that will sell for about 4 times that amount; this leads to McMansions that may not really be what the market wants. Lower land prices could lead to the production of more modest single-family homes where there is demand for them.
And when one no longer needs or can manage all that the large house on the large lot requires, one moves to a more modest home, in the center of things, sharing the land rent with many others in a high rise, unburdened by taxes on the building.
Affordable family formation. Sounds good to me!
I think about one of my favorite quotes:
He who sees the truth, let him proclaim it, without asking who is for it or who is against it. This is not radicalism in the bad sense which so many attach to the word. This is conservatism in the true sense.
That's the kind of conservatism I favor. That, and conservative taxation.
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