Economic Development in the Heartland Shouldn’t Be Deplorable

2017-04-13 – There’s been a debate among Democrats about how to see Trump supporters. Are they the enemy? Or are they folks who have been ignored, who might be won over? I’ve taken the latter position. See my post “Reaching Out to the Other Side—Without Compromising on Principles,” which is one of many I’ve written over the years.

The differences between the two sides of the debate really centers on whether reaching out compromises your principles. So today, I’m going to talk about one way to reach out without compromise.

Economic development in this country is highly concentrated. More than you would think. According to the radio program Marketplace: “Half of all the venture capital in America goes to just two places: the San Francisco Bay Area and New York.” The other half is spread out over the rest of the country.

It is spread very thin.

What this means is that when an industry closes in Detroit or Omaha, there’s little interest from investors in filling the gap. Why should they go to an unfamiliar place when they’re making billions in New York and the Silicon Valley?

It seems to me that Democrats and Trump supporters might have a common interest in changing that. And it wouldn’t require even a passing glance at the hot-button issues that divide us.

All that would be required would be a policy to encourage geographic diversity in investment. It would not require anyone to mandate investment in Detroit or Omaha or any particular place. Geographic diversity needs to be the goal.

Mathematicians have ways of measuring diversity and these measurements are used in biology to measure populations of various plants or animals or in the world of finance where diversity is called portfolio diversification.

Incentive could be given to investors for greater geographic diversity (or disincentives for lesser geographic diversity) and the result would be to push venture capital into the heartland.

Undoubtedly, this would be opposed by 1%ers on both coasts. But that would be a sign that we might be onto something.

 

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